It’s the Americans, the bastards!
For all these reasons to pretend that there is any legal reason that prevents the publication of country-by-country data should candidly be bluntly dismissed as straightforwardly untrue. Instead what my sources tell me is that the suggestion has been made in this form to appease the USA.
In the USA the inclusion of country-by-country reporting data in tax returns is seen as a European imposition on US companies even though it is actually an OECD issue. It is massively resented by the Republicans and is only being implemented because it has been argued that it is a mere administrative reform to tax returns not requiring legislation for approval, which would be blocked if it was proposed, like most things of any value are in the US these days. But, in a compromise the IRS thinks it has to make to get the data I understand that they have told the EU that they believe that the OECD stipulation that the data be unpublished is binding and that if any country or countries publish data for jurisdictions other than their own then they will not share data the US receives on CBCR with them. Apparently they accept the EU as one administration for this purpose.
So, the threat of legal action is from the U.S. here and the issue arises because the OECD rules do not require that a group of companies submit its country-by-country report to all the countries in which it trades but only to the tax authority of its parent company, which is then legally bound to share it, which is what it looks like the US is refusing to do. The consequence is that the US can hold the EU to ransom as a result.
It’s not the Americans, the bastards, it’s the companies, the bastards!
The EU has said of country-by-country reporting that to demand publication of data for all the jurisdictions in which a multinational company trades could lead it into a legal minefield.
Now, of course one has to be cautious about an excuse offered by an unnamed official to a journalist on a document that may, or may not, have been officially leaked. The claim may not be true, if course, and may just look usefully convenient when the political will to act does not exist.
But suppose for a moment that the claim is true. Suppose that the EU – the largest supra-national legislator in the world – thinks it cannot legislate because of a legal minefield. Who created that minefield? What is the risk? And why can’t it be cleared?
I have already dealt with the likelihood that the USA is the real risk and it’s not threatening legal action: blackmail is more its line. So the risk cannot be from there, and it cannot be from EU member states, so it must come from companies.
The clear implication of this is unpalatable. As many of us have feared to be the inevitable direction of trade deals and agreements, the EU may now be signalling that it can only regulate companies to the extent that they concur with its wishes, and if they do not then the EU is recognising that the threat of legal action may be real.
In other words the rule of law is now conditional on the consent of those supposedly subject to it.
Corporate law may, then, be prevailing.
This is the route to the corporate state, and that is fascism.
The fight over country-by-country reporting is, then, no minor issue: this is about the right to decide who really rules and the stakes are very high indeed.
And, err, yes, we do normally think that the rule of law is conditional on the consent of those subject to it. Any number of leftie campaigns are about “No, we do not consent to this law, change it!”. As is most of Ritchie’s campaigning of course. No, I do not consent to people paying less tax than I think they ought to, change the law!
Further, err, yes, we would rather like the government to obey the law. Like, you know, the UK government over Cadbury, Vodafone and the CFC rules? Or only locking up child rapists when there is evidence that child rape has occurred and it was ‘im what dunnit?
You know, law?