The International Chamber of Commerce (ICC) has expressed concern at a European Commission (EC) move to implement rules on the exchange – and possible public disclosure – of multinational company tax information that go beyond international guidelines set out in the Base Erosion Profit Shifting (BEPS) plan of the Organisation for Economic Co-operation and Development (OECD) and G20.

New rules were endorsed by European Union (EU) finance ministers last Tuesday within the context of the proposed EU Anti-Tax Avoidance (ATA) package presented by the EC earlier this year.

The new measures on exchange of tax data will oblige multinational companies to disclose data on revenues, profits and taxes to their local tax administrations and allow the data to be exchanged among the 28 EU states. The EC is also considering bringing a second country-by-country reporting standard into force, with considerations to include provisions for public disclosure of tax data as part of this package.

ICC fully acknowledges the importance of ensuring adequate access to information for tax authorities in order to determine the correct amount of tax for businesses. However, the world business organization believes that the reports should not be made public and that disclosure would be counterproductive to efficient tax administration. It would furthermore be harmful to the relationship between taxpayers and tax authorities. ICC therefore urges the EC to implement measures that are consistent with international guidelines that support the confidentiality of commercially sensitive information.

Christian Kaeser, Global Head of Tax at Siemens and Chairman of the ICC Commission on Taxation said: “Business fears that in deviating from international tax guidelines, the EC risks setting a precedent that could potentially undermine global efforts to establish a consistent international tax landscape.

We caution against implementation of domestic or regional tax legislation that could lead to disparate rules, increased complexity and double taxation.

ICC calls for a coordinated implementation of the combined deliverables of the G20/BEPS project on a multilateral basis with a consensus approach in order for the solutions to be consistent and uniformly applied at the international level.

The six legally binding measures of the ATA package to address aggressive tax planning include the following:

  1. Hybrid mismatches
  2. Interest deductibility
  3. Controlled Foreign Companies (CFCs)
  4. Switch-over clause
  5. Exit tax
  6. General Anti-Abuse Rule (GAAR)

Some of the provisions have been extracted from the Common Consolidated Corporate Tax Base (CCCTB) proposal. They were part of a broader, consolidated regime across countries aimed at creating a strong and dynamic internal market, able to compete with other major economies and better facilitate cross-border trade, enhance growth, employment and investment in the EU.

ICC is concerned that these new EC measures which significantly diverge from the OECD/BEPS project, will reduce rather than stimulate trade in the EU and negatively impact international trade by creating new tax barriers. The EC should restrict itself to the implementation of the OECD BEPS Action Plan and follow the initial path of a competitive Common and Consolidated Corporate Tax Base.

By implementing a directive that goes beyond internationally agreed guidelines, the EC will introduce double or multiple standards undermining the consistency of the international tax system. In addition to this, the proposed measures could put the EU at a competitive disadvantage in attracting global investment,” Mr Kaeser said.

Learn more about the ICC Commission on Taxation