Oil, natural-gas and mining companies will be forced by the European Union to disclose taxes on profit, license fees and other payments they make to governments as part of EU efforts to boost corporate transparency.
Diplomats meeting today in Brussels signed off on the plans, which will also cover forestry. The disclosure rules apply to listed companies, after similar requirements for non-listed firms were agreed on earlier this year.
“These new rules will encourage European companies to be more open about what they are paying to governments around the world,” Ireland’s Finance Minister Michael Noonan said in a statement. Ireland holds the rotating presidency of the EU.
The transparency rules are in the vanguard of a broader EU push to force companies to disclose more information about their internal financial arrangements. Banks with headquarters in the bloc will be required from 2015 to reveal the profits they make, subsidies they receive and taxes they pay on a country-by-country basis. Michel Barnier, the EU’s finance services chief, said last week that he would seek to extend the measure to all large companies, in order to satisfy calls from EU leaders for action against tax evasion.
The rules agreed on today for oil companies and other firms in the extractive industries will take effect later this year, the Irish presidency said.
The law also adjusts rules for listed companies more generally, including by imposing tougher requirements for companies to disclose holdings of securities, in a bid to prevent a company from covertly building control over another business.
Barnier’s push comes amid international controversy on whether companies like Apple Inc. and Google Inc. are taking excessive advantage of cross-border tax loopholes. EU leaders vowed last week to investigate “aggressive” tax planning, and pledged support for tougher corporate transparency rules.
Today’s deal is a “significant advance in our effort to make European companies more responsible and transparent,” Barnier said in an e-mailed statement.