• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 5/31/2013

EU - Proposal for EU-listed companies to report government payments 

May 31:  A proposal pending in the European Union would require companies listed in EU markets to report, on a country-by-country basis, amounts paid to EU Member State governments, including taxes.

This week’s announcement reflects the European Parliament agreement on amendments to the “Transparency Directive”—i.e., a directive relating to the harmonization of transparency requirements in relation to information to be provided by issuers whose securities are admitted to trading on a regulated market.

The proposed revision to the Transparency Directive would require country reporting of payments to governments by EU-listed companies active in the mineral extractive (e.g., oil, gas, and mining) and forestry industries.

The details of the agreement are not yet public, but according to a 30 May statement, the disclosure requirements are expected to be similar to those under the recently agreed upon Accounting Directive (i.e., the directive on the annual financial statements, consolidated financial statements and related reports of certain types of undertakings), which provides for disclosure of payments to governments of above a €100,000 threshold. For these purposes, payments include royalties, dividends, and taxes levied on income, production or profits of companies (but excluding VAT, individual income taxes and sales taxes).

The European Parliament is expected to vote on the two revised directives in June 2013.

KPMG observation

Initially, these reporting requirements aimed at greater governmental transparency in developing countries. With the growing focus on tax transparency at the global and EU levels (e.g., FATCA, information exchange agreements, per-country reporting requirements for banks, etc.), the reporting requirements under the Transparency and Accounting Directives are now seen by tax professionals as a method to address tax evasion and aggressive tax planning. It is reported that there are discussions for extending these requirements to all large companies—regardless of the industry sectors in which they operate.

For more information, contact a tax professional with KPMG’s EU Tax Centre:

Robert van der Jagt
Chairman, KPMG’s EU Tax Centre

Barry Larking

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