We need to find out more about this

December 12, 2016 at 8:23 pm
Totally off topic but followers of TRUK will be well aware of our Prof’s love of CBC reporting (and the fact he is undisputed creator of CBCR). Well, the French Constitutional Court (Conseil constitutionnel) has rules on 8 December 2016 that CBCR is incompatibility with the French constitution. Per IBFD “The Court ruled that such public CbC reporting disregards the business freedom (liberté d’entreprendre) in so far as it compels companies to disclose their business strategy. Although the fight against tax evasion and tax fraud is a constitutional value, the obligation to make public economic and fiscal data on a country-by-country basis will enable competitors operating in the same market to identify key elements of their industrial and commercial strategy, which disproportionally affects the freedom of a company as compared to the objective of the public CbC reporting. Therefore, the Constitutional Court declared that article 137 of the Law was unconstitutional and repealed this article from the Law (published in the Official Journal on 10 December 2016).”

And just for the jollies of it:

For all these reasons France has taken a logical step forward that will, I hope, see its way onto its statute book. And there is now no good reason why not: every major multinational corporation will now have to prepare country-by-country reporting data and there is no auditor on earth who could not now properly appraise and audit the risk in that report if they are to be sure that the tax charge in that entities accounts is truthfully and fairly stated for audit purposes. As such very soon the entire cost of publishing country-by-country reporting data will be the expenditure involved in uploading a PDF to the web.

The time for excuses on country-by-country reporting is over. The time for publication is now. If France if leading the way, good for it.

That was before the court ruled on it of course.

14 thoughts on “We need to find out more about this”

  1. In 3.. 2… 1….

    1. Candidly, neolibrul blah blah waaaaaaaahhhh mash mash mash mash
    2. See above
    4. Etc.

  2. So Much For Subtlety

    France has joined the Vast Neo-Liberal Conspiracy. I look forward to Ritchie denouncing them as a tax haven any moment now.

  3. 100. Paragraph I of Article 137 inserts in the Commercial Code an Article L. 225-102-4 which requires certain companies whose consolidated turnover exceeds a threshold set at 750 million euros one Obligation in respect of taxes on profits. For each of the Member States of the European Union in which the companies carry on business, the number of employees, the amount of net sales, the amount The amount of income tax payable, the amount of tax paid and an explanation of any discrepancies with the amount due, and the amount of undistributed profits. Other reporting requirements are provided for the other States in which the companies operate. Paragraph II of article 137 provides for coordination within the article L. 223-26-1 of the same code. Paragraph III of Article 137 repeals paragraphs III to V of Article 7 of the aforementioned Law of 26 July 2013 providing for the introduction of country-by-country declarations of public activities for certain undertakings, Are not in force. Paragraph IV of Article 137 lays down the procedures for the entry into force of paragraphs I to III thereof. Paragraph V provides for a gradual lowering of the turnover threshold adopted for liability to the public reporting obligation. Paragraph VI of Article 137 relates to the delivery by the Government to Parliament of an evaluation report.

    101. The senators and the applicants argue that the provisions of Article L. 225-102-4 of the Commercial Code disregard the freedom to undertake when they compel French companies to disclose to the public information of a To reveal their business strategy. The Applicant Senators also contend that the obligation thus imposed imposes an excessive burden on the companies subject to it, contrary to the principle of equality before public offices.

    102. In introducing Article L. 225-102-4 of the Commercial Code, the legislator intended, by a measure of transparency, to avoid the relocation of taxable bases in order to combat tax evasion and avoidance. It thus pursued an objective of constitutional value.

    103. However, the obligation on certain companies to make public economic and fiscal indicators corresponding to their activity on a country-by-country basis is such as to enable all the operators involved in the markets in which those activities are carried out, And in particular their competitors, to identify essential elements of their industrial and commercial strategy. Such an obligation therefore entails the freedom to undertake an infringement manifestly disproportionate to the objective pursued. Consequently, without the need to examine the other complaint, paragraph I of section 137 of the law referred to is contrary to the Constitution. The same is true of the rest of this article, which is inseparable from it.

    104. Compliance with the Constitution of a law already promulgated can be assessed during the examination of the legislative provisions which modify, supplement or affect its scope. In the present case, the provisions of paragraph III of Article 137 declared contrary to the Constitution had the effect of repealing paragraphs III to V of Article 7 of the Law of 26 July 2013, which establish a system similar to For the same reasons, these paragraphs III to V of Article 7 of the Law of 26 July 2013 must also be declared contrary to the Constitution.

  4. The French term for tax haven is paradis fiscal – fiscal paradise. When they translate this to English, they sometimes confuse their term with ours and come up with “tax heaven”. I always* chuckle at that.

    *(Although not as much as when “Cumulative Production” is abbreviated on a graph to “Cum Production”).

  5. Tim Newman, Cum Prod is even better. Not sure how a cum prod works, but it’s presumably some sort of ‘adult’ bedroom gadget.

  6. And yes, the tax haven / heaven distinction is amusing and I think also reveals different national characteristics:

    – The French have “tax heavens”, rather louche places where companies can frolic happily in a tax-free playground.

    – The British have ‘tax havens’, safe harbours where, like our ships, their hard-working international trading money can pause for a safe rest and refit.

  7. “and the fact he is undisputed creator of CBCR)”

    The words ‘fact’, ‘undisputed’ and ‘creator’ shouldn’t be in that sentence.

  8. Bloke in North Dorset

    I’m not sure we should be talking about cum prods and tongue in cheek on the same thread, the plot might start falling foul of anti porn laws.

  9. Pointed this out to him long time ago that some of the information he wants is in the management accounts and there’s a reason they don’t publish the information even if they do know what it is already. Also that the leve used for management and strategic decisions is not going to be down to the nitpicking level required for tax purposes. The concepts of accuracy and information being useful, relevant and cost effective like a lot of things seems to escape him

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