Article 46 Equivalence criteria
1. Undertakings referred to in Articles 42 and 44 that prepare and make public a report complying with third-country reporting requirements assessed, in accordance with Article 47, as equivalent to the requirements of this Chapter are exempt from the requirements of this Chapter except for the obligation to publish this report as laid down by the laws of each Member State in accordance with Chapter 2 of Directive 2009/101/EC. 2. The Commission shall be empowered to adopt delegated acts in accordance with Article 49 identifying the criteria to be applied when assessing, for the purposes of paragraph 1 of this Article, the equivalence of third-country reporting requirements and the requirements of this Chapter. 3. The criteria identified by the Commission in accordance with paragraph 2 shall: (a) include the following: (i) target undertakings, (ii) target recipients of payments, (iii) payments captured, (iv) attribution of payments captured, (v) breakdown of payments captured, (vi) triggers for reporting on a consolidated basis, (vii) reporting medium, (viii) frequency of reporting, and (ix) anti-evasion measures; (b) otherwise be limited to criteria which facilitate a direct comparison of third-country reporting requirements with the requirements of this Chapter.
Amendment rationale: CONTEXT OF THE PROPOSAL The proposal for a Council Directive adapting Directive 2013/34/EU is necessitated by the accession of the Republic of Croatia to the European Union. The Treaty concerning the accession of the Republic of Croatia to the European Union[1] (hereinafter: “the Treaty of Accession”) was signed by all Member States of the European Union and the Republic of Croatia at Brussels on 9 December 2011. Article 3(3) of the Treaty of Accession provides that it shall enter into force on 1 July 2013 provided that all the instruments of ratification have been deposited before that date. Article 3(4) of the Treaty of Accession enables the institutions of the Union to adopt before accession measures referred to, inter alia, in Article 50 of the Act concerning the conditions of accession of the Republic of Croatia[2] (hereinafter: “the Act of Accession”). These measures shall enter into force only subject to and on the date of the entry into force of the Treaty of Accession. Article 50 of the Act of Accession provides that where acts of the institutions adopted prior to accession require adaptation by reason of accession, and the necessary adaptations have not been provided for in this Act of Accession or its Annexes, the Council or the Commission (if the original acts were adopted by the Commission) shall adopt the necessary acts. The Directive 2013/34/EU was adopted on 26 June 2013 and published in the Official Journal of the European Union on 29 June 2013. It does not include necessary references to the companies established in Croatia that should be within the scope of the Directive. Council Directive 2013/24/EU of 13 May 2013 adapting certain directives in the field of company law, by reason of the accession of the republic of Croatia adapted Directives 78/660/EEC and 83/349/EEC, in order to add to the scope of those Directives the relevant list of Croatian limited liability companies. However, these directives were repealed when Directive 2013/34/EU entered into force in July 2103. Therefore it is necessary to take into account this evolution of the Union law and adapt Directive 2013/34/EU accordingly. The present proposal for a Council Directive covers the technical adaptations to Directive 2013/34/EU that are required by reason of the accession of Croatia.
Revised version (Article 46 Equivalence criteria):
1. Undertakings referred to in Articles 42 and 44 that prepare and make public a report complying with third-country reporting requirements assessed, in accordance with Article 47, as equivalent to the requirements of this Chapter are exempt from the requirements of this Chapter except for the obligation to publish this report as laid down by the laws of each Member State in accordance with Chapter 2 of Directive 2009/101/EC. 2. The Commission shall be empowered to adopt delegated acts in accordance with Article 49 identifying the criteria to be applied when assessing, for the purposes of paragraph 1 of this Article, the equivalence of third-country reporting requirements and the requirements of this Chapter. 3. The criteria identified by the Commission in accordance with paragraph 2 shall: (a) include the following: (i) target undertakings, (ii) target recipients of payments, (iii) payments captured, (iv) attribution of payments captured, (v) breakdown of payments captured, (vi) triggers for reporting on a consolidated basis, (vii) reporting medium, (viii) frequency of reporting, and (ix) anti-evasion measures; (a) include the following: (i) target undertakings, (ii) target recipients of payments, (iii) payments captured, (iv) attribution of payments captured, (v) breakdown of payments captured, (vi) triggers for reporting on a consolidated basis, (vii) reporting medium, (viii) frequency of reporting, and (ix) anti-evasion measures; (b) otherwise be limited to criteria which facilitate a direct comparison of third-country reporting requirements with the requirements of this Chapter.
Article 47 Application of equivalence criteria
The Commission shall be empowered to adopt implementing acts identifying those third-country reporting requirements which, after applying the equivalence criteria identified in accordance with Article 46, it considers equivalent to the requirements of this Chapter. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 50(2).
Article 48 Review
The Commission shall review and report on the implementation and effectiveness of this Chapter, in particular as regards the scope of, and compliance with, the reporting obligations and the modalities of the reporting on a project basis. The review shall take into account international developments, in particular with regard to enhancing transparency of payments to governments, assess the impacts of other international regimes and consider the effects on competitiveness and security of energy supply. It shall be completed by 21 July 2018. The report shall be submitted to the European Parliament and to the Council, together with a legislative proposal, if appropriate. That report shall consider the extension of the reporting requirements to additional industry sectors and whether the report on payments to governments should be audited. The report shall also consider the disclosure of additional information on the average number of employees, the use of subcontractors and any pecuniary penalties administered by a country. In addition, the report shall analyse the feasibility of the introduction of an obligation for all Union issuers to carry out due diligence when sourcing minerals to ensure that supply chains have no connection to conflict parties and respect the EITI and OECD recommendations on responsible supply chain management.
Amendment rationale: CONTEXT OF THE PROPOSAL The proposal for a Council Directive adapting Directive 2013/34/EU is necessitated by the accession of the Republic of Croatia to the European Union. The Treaty concerning the accession of the Republic of Croatia to the European Union[1] (hereinafter: “the Treaty of Accession”) was signed by all Member States of the European Union and the Republic of Croatia at Brussels on 9 December 2011. Article 3(3) of the Treaty of Accession provides that it shall enter into force on 1 July 2013 provided that all the instruments of ratification have been deposited before that date. Article 3(4) of the Treaty of Accession enables the institutions of the Union to adopt before accession measures referred to, inter alia, in Article 50 of the Act concerning the conditions of accession of the Republic of Croatia[2] (hereinafter: “the Act of Accession”). These measures shall enter into force only subject to and on the date of the entry into force of the Treaty of Accession. Article 50 of the Act of Accession provides that where acts of the institutions adopted prior to accession require adaptation by reason of accession, and the necessary adaptations have not been provided for in this Act of Accession or its Annexes, the Council or the Commission (if the original acts were adopted by the Commission) shall adopt the necessary acts. The Directive 2013/34/EU was adopted on 26 June 2013 and published in the Official Journal of the European Union on 29 June 2013. It does not include necessary references to the companies established in Croatia that should be within the scope of the Directive. Council Directive 2013/24/EU of 13 May 2013 adapting certain directives in the field of company law, by reason of the accession of the republic of Croatia adapted Directives 78/660/EEC and 83/349/EEC, in order to add to the scope of those Directives the relevant list of Croatian limited liability companies. However, these directives were repealed when Directive 2013/34/EU entered into force in July 2103. Therefore it is necessary to take into account this evolution of the Union law and adapt Directive 2013/34/EU accordingly. The present proposal for a Council Directive covers the technical adaptations to Directive 2013/34/EU that are required by reason of the accession of Croatia.
Revised version (Article 48 Review):
The Commission shall review and report on the implementation and effectiveness of this Chapter, in particular as regards the scope of, and compliance with, the reporting obligations and the modalities of the reporting on a project basis. The review shall take into account international developments, in particular with regard to enhancing transparency of payments to governments, assess the impacts of other international regimes and consider the effects on competitiveness and security of energy supply. It shall be completed by 21 July 2018. The report shall be submitted to the European Parliament and to the Council, together with a legislative proposal, if appropriate. That report shall consider the extension of the reporting requirements to additional industry sectors and whether the report on payments to governments should be audited. The report shall also consider the disclosure of additional information on the average number of employees, the use of subcontractors and any pecuniary penalties administered by a country. The report shall also consider, taking into account developments in the OECD and the results of related European initiatives, the possibility of introducing an obligation requiring large undertakings to produce on an annual basis a country-by-country report for each Member State and third country in which they operate, containing information on, as a minimum, profits made, taxes paid on profits and public subsidies received. In addition, the report shall analyse the feasibility of the introduction of an obligation for all Union issuers to carry out due diligence when sourcing minerals to ensure that supply chains have no connection to conflict parties and respect the EITI and OECD recommendations on responsible supply chain management.
Article 49 Exercise of delegated powers
1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article. 2. The power to adopt delegated acts referred to in Article 1(2), Article 3(13) and Article 46(2) shall be conferred on the Commission for an indeterminate period of time from the date referred to in Article 54. 3. The delegation of power referred to in Article 1(2), Article 3(13) and Article 46(2) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of that decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force. 4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council. 5. A delegated act adopted pursuant to Article 1(2), Article 3(13) or Article 46(2) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or the Council.
Amendment rationale: CONTEXT OF THE PROPOSAL Reasons for and objectives of the proposal A healthy Single Market needs a fair, efficient and growth-friendly corporate tax system, based on the principle that companies should pay taxes in the country where profits are generated. Aggressive tax planning undermines this principle. The majority of companies do not engage in aggressive tax planning and suffer a competitive disadvantage to those that do. Small and medium-sized companies are particularly affected by this phenomenon. Fighting against tax avoidance and aggressive tax planning, both at EU a nd global level, is a political priority for the European Commission. As part of a broader strategy for a Fair and Efficient Corporate Tax System in the EU 1 , p ublic scrutiny can help to ensure that profits are effectively taxed where they are generated. Pu blic scrutiny can reinforce public trust and strengthen companies' corporate social responsibility by contributing to the welfare through paying taxes in the country where they are active. In addition, it can also promote a better informed debate on potent ial shortcomings in tax laws. The Commission announced in March 2015 a comprehensive list of initiatives in its Action Plan on a Fairer Corporate Tax System (COM(2015)302) and proposed as part of the subsequent Anti-Tax Avoidance Package 2 (ATAP), to implem ent in the Union Action 13 of the OECD Action Plan endorsed by the G20 to fight base erosion and profit shifting (hereafter, BEPS). As a result, tax authorities will receive a country-by-country report from multinational enterprises (MNEs) on income tax pa id which should enable better compliance with tax laws. Responding to the calls from the G20 and elsewhere, greater transparency on the side of companies is needed to enable public scrutiny of whether tax is paid where profits are produced. This proposal requires that MNEs disclose publicly in a specific report the income tax they pay together with other relevant tax-related information. MNEs, whether headquartered in the EU or outside, with turnover of more than EUR 750m will need to comply with these additional transparency requirements. For the first time, not only European businesses but also non-European multinational companies doing business in Europe will have the same reporting obligations. Third country jurisdictions which do not respect international tax good governance standards create particular opportunities for tax avoidance and tax evasion. If MNEs are active in such jurisdictions, special transparency requirements should apply. This proposal focusses on corporate groups with a worldwide con solidated net turnover of more than EUR 750 million, in line with the scope of global OECD initiatives on tax transparency. The proposal does not impose any obligations on small and medium-sized companies 3 . It is proportionate both in terms of scope and i nformation to be disclosed so as to limit compliance and other costs for affected companies, as well as to avoid jeopardising their competitiveness or expose them unduly to double taxation risks. It fits into the multilateral approach supported by the G20 and the OECD. The Commission will continue to work proactively on these issues with all relevant international partners.
Revised version (Article 49 Exercise of delegated powers):
1. The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article. 2. The power to adopt delegated acts referred to in Article 1(2), Article 3(13) and Article 46(2) shall be conferred on the Commission for an indeterminate period of time from the date referred to in Article 54. 3. The delegation of power referred to in Article 1(2), Article 3(13) and Article 46(2) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of that decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force. 3a. Before adopting a delegated act, the Commission shall consult experts designated by each Member State in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making ( 13 ). 4. As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council. 5. A delegated act adopted pursuant to Article 1(2), Article 3(13) or Article 46(2) shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of two months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by two months at the initiative of the European Parliament or the Council.
Article 50 Committee procedure
1. The Commission shall be assisted by a committee. That committee shall be a committee within the meaning of Regulation (EU) No 182/2011. 2. Where reference is made to this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.
Article 51 Penalties
Member States shall provide for penalties applicable to infringements of the national provisions adopted in accordance with this Directive and shall take all the measures necessary to ensure that those penalties are enforced. The penalties provided for shall be effective, proportionate and dissuasive.
Article 52 Repeal of Directives 78/660/EEC and 83/349/EEC
Directives 78/660/EEC and 83/349/EEC are repealed. References to the repealed Directives shall be construed as references to this Directive and shall be read in accordance with the correlation table in Annex VII.
Article 53 Transposition
1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by 20 July 2015. They shall immediately inform the Commission thereof. Member States may provide that the provisions referred to in the first subparagraph are first to apply to financial statements for financial years beginning on 1 January 2016 or during the calendar year 2016. When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member States. 2. Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.
Article 54 Entry into force
This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union .
Article 55 Addressees
This Directive is addressed to the Member States.