Oil to Mining Face Tougher Tax-Disclosure Rule After EU VoteJim Brunsden
Oil, natural-gas and mining companies will be forced to disclose what taxes, license fees and other payments they make to governments as part of plans approved by European Parliament lawmakers to boost corporate transparency.
Legislators today approved the plans, which will also cover forestry, at a meeting of the assembly in Strasbourg, France. The transparency proposals would also scrap quarterly reporting rules for publically traded companies from all industries, and impose tougher requirements on businesses to disclose holdings of securities, in a bid to prevent a company from covertly exercising control over another firm.
Today’s vote by the parliament paves the way for the measures to be formally signed into law, and to take effect later this year. EU nations signaled their support for the plans in Brussels last month.
The transparency rules are in the vanguard of a broader EU push to force companies to disclose more information about their internal financial arrangements. Under plans approved earlier this year, banks with headquarters in the bloc will be required starting 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 financial-services chief, has said he’ll seek to extend the bank measures to all large companies, in order to satisfy calls from EU leaders for action against tax evasion.
“We must go further now and take measures on more transparency on tax for all large companies and groups - the taxes they pay, how much and to whom,” Barnier said in an e-mailed statement today.
It “should be possible to introduce rules for the publication of the information on a country-by-country basis,” Barnier said.
One option, he said, would be to add the measures to existing proposals that would force large companies to disclose more data on their social and environmental performance.
The EU’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 month to investigate “aggressive” tax planning, and pledged support for tougher corporate transparency rules.