The extraterritoriality issue was covered in the impact assessment(1) accompanying the Commission proposal for a directive(2) on public country-by-country reporting. The impact on third countries, including developing countries, was examined. The Commission therefore proposes to cover all multinational companies operating in the EU, whether they are established in the EU or in a third country. Taking extraterritoriality into account, the Commission carefully crafted the proposal so as companies would also disclose aggregated information relating to their operations in non-EU countries.
The Commission considers the proposal proportionate and sufficient to reach the objective of increased corporate income tax transparency, to enable a better informed public debate.
To support the fight against tax avoidance and tax evasion in developing countries, notably in Africa, the Commission is implementing a holistic approach outlined in the ‘Collect More — Spend Better’ Staff Working Document(3) and has endorsed the Addis Tax Initiative(4) commitment to collectively double support to Domestic Revenue Mobilisation by 2020.
The Commission collaborates with the United Nations, International Monetary Fund, World Bank Group and Organisation for Economic Cooperation and Development to build capacity on tax issues, and supports the inclusion of developing countries in international tax fora, notably through the Base Erosion Profit Shifting framework.
At regional and national level, the Commission supports the Africa Tax Administrative Forum and International Monetary Fund-Regional Technical Assistance Centres. Reforms in Domestic Revenue Mobilisation are also an important component within the Commission’s budget support operations.