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Ireland to move on multinationals’ disclosure of more information to tax authorities

Ireland to move on multinationals’ disclosure of more information to tax authorities

DUBLIN: Ireland is to become one of the first countries to introduce measures aimed at ensuring multinationals disclose more information to tax authorities.

In the upcoming budget, the Government will introduce moves obliging multinationals to draft country-by-country reports on their global activities, according to sources.

If enacted the new rules could affect our biggest corporations, such as CRH, Glanbia, Kerry and Ryanair, as well as major foreign multinationals that have located their global headquarters here over recent years for tax reasons.

The Organisation for Economic Co-operation and Development (OECD), as part of its base erosion and profit shifting project aimed at reforming global rules on business taxation, is drafting measures which it is urging countries to implement, including country-by-country reporting. Under the proposals these reports will be confidential and be given to the tax authorities of the country in which each multinational is headquartered. The reports will then be shared with other tax authorities . The plan has been designed to assist tax authorities get a fuller picture of how multinationals structure their global affairs, while at the same time addressing concerns about confidentiality.

However, groups such as Christian Aid have said the reports should be publicly available and that many developing countries will not be able to access the reports through the global tax treaty network.

They have argued the world’s poorest countries lose out on massive amounts of taxation because of how the global tax rules currently operate, and that public, country-by-country reports will help show how unfair the system currently is.

Until the United States signs up to any country-by-country reporting system, the US multinationals that play such a major role in the Irish economy will be excluded from any such requirement. The Republican Party in the US is strongly against the measure.

Some observers believe a public country-by-country reporting regime for multinationals will eventually be put in place. “That is the way the trend is going and I believe it is inevitable,” said Sorley McCaughey, Christian Aid Ireland’s head of advocacy and policy.

Earlier this year the European Parliament voted in favour of the inclusion of public country-by-country reporting by multinationals as part of a revised shareholders’ rights directive being negotiated for the union.