UK moves forward on Country by Country reporting

   0   0 Blog, Corporate Tax, Country by Country

They said it would never happen – but here it comes. From the UK lower house of parliament, an amendment to legislation which looks like this:


This is very welcome news, even though the amendment is far from perfect.

It’s rare indeed for an opposition amendment to a Finance Bill to be successful, and this reflects great work by Caroline Flint, a Member of Parliament (MP) and colleagues, along with major NGOs including Christian Aid, ActionAid, Oxfam and Save the Children, in obtaining cross-party support, leading to the government’s decision to support it also. Special thanks, of course, to Richard Murphy, who pioneered the concept.

Country-by-country reporting, a project pushed by TJN since its inception in 2003, is about requiring multinational corporations to disclose financial details about their operations in every country where they are active. This is obviously a basic prerequisite of democratic society, yet it has been largely absent from the world until recently.  As our Country by Country Reporting page attests, institutions (such as the EU and OECD) and individual countries, including the UK, are now starting to put this concept into practice. 

There is a big catch, however: and that is whether this information should only be available to (selected) tax authorities, or to the general public. Lobbying by multinationals has so far generally ensured that Country by Country reporting (CbCR) will remain hidden from journalists, anti-corruption campaigners, market participants, and so on. As the recent Apple affair, the Luxleaks scandal, and many other cases attest, governments can’t be trusted on their own to put in the required effort to tax multinationals properly – so it’s essential that this information is made public, so that societies can ensure that it’s not just the multinationals who are called to account, but governments too.

So this amendment is a significant step forwards, enshrining the view that this information should be public. But note the catches most obviously, “The Treasury may . . . “. It doesn’t commit the UK to publication. This is realpolitik in action: when Caroline Flint MP first proposed an amendment, the UK government, which has a long track record of being in thrall to multinational lobbying, said it wouldn’t accept it, so this softer version was agreed. Flint was quoted in The Guardian:

“We have changed the amendment so that it no longer binds the government to a strict timetable, but would commit ministers to the principle of transparency . . . “The only reason they might reject this is if they really do not want it to happen.”   

A cynic might think that the government preferred to accept an amendment giving it the power, but not the obligation, to make CBCR public, rather than risk defeat on an amendment including the obligation. But the government’s public support for this, following that of the previous Chancellor George Osborne, suggests there is a growing and genuine commitment. Opposition MPs should now be looking to elicit a statement of the form, “Her Majesty’s Government will work to obtain a multilateral agreement (e.g. EU or G20) to publish this data for all multinationals; but will act unilaterally if that agreement is not achieved by (e.g. 2018).”

In addition, there remains a lack of clarity on how far the amendment could be made to bind on multinationals that are not UK-headquartered. This measure is therefore short of what is ultimately required – but it is nevertheless an important advance towards the eventual publication of harmonised country-by-country reporting for all significant multinationals globally.

Related Posts

UN must defend target to curtail multinational companies’ tax abuse

Photo by Luca Santori, Creative Commons LicenseThe Tax Justice Network, The Independent Commission for the Reform of International Corporate Taxation, and the Global Alliance for Tax Justice call on the UN Secretary General to make sure the commitment to action on tax abuses by multinational companies remains part of the new UN Sustainable Development Goals.


The BVI: Responsible for worldwide tax losses of $37.5 billion a year

BVI report blogAn extraordinary report by consultants Capital Economics, for BVI Finance, claims that the British Virgin Islands are responsible for $1.5 trillion of assets invested around the world, and that these result in 2.2 million jobs and $15 billion in tax revenue. A better approximation would be that the BVI imposes global tax losses of $37.5 […]


Event: Making Tax Work for Women in the UK and Globally

Invitation_ Tax and Gender eventOn Wednesday 28th June 2017 at 16.30 our very own Liz Nelson will be speaking at an event in London that aims to bring together gender and tax justice advocates to highlight the need for coherent and gender-responsive fiscal policies to safeguard the rights of women and girls both in the UK and globally. The […]


Historic event on women, human rights and tax justice in Bogota

BogotaLast week civil society organisations, researchers, labour union activists and policy makers met in Bogota, Colombia to explore how tax justice issues can ensure governments, multinational corporations and others meet their obligations to women in order to secure their full range of human rights. The Women’s Rights and Tax Justice conference opened with a conversation […]


The Offshore Wrapper: the Panama Papers, one year on

Photos from the Protest outside PwC 1 Embankment Place, part of the Global week of action for tax justiceWelcome to the Offshore Wrapper – your weekly update from TJN.  Happy Paniversary! This week it’s been one year since the Panama Papers were leaked, and a number of organisations around the world have been marking the occasion though the global week of action for tax justice. In London, activists from the TJN and the […]


Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top