European Commission consultation on the potential economic consequences of country-by-country reporting under the EU Capital Requirements Directive
14 Jul, 2014
The European Commission has launched a consultation to obtain information and views from stakeholders on the potential economic consequences of country-by-country reporting by institutions under Article 89 of the EU Capital Requirements Directive 4 (“Article 89 CRD IV”).
CRD IV was agreed by the European Council on 20 June 2013 and the legislation was published in the Official Journal on 27 June 2013. CRD IV is intended to apply from 1 January 2014.
Article 89 CRD IV requires, among other things, all “credit institutions” and “investment firms” to report on a country-by-country basis from 1 July 2014. This will include a requirement to disclose annually:
- Their name;
- Nature of activities and geographic location;
- Number of employees; and
- Turnover on a consolidated basis by country where they have an establishment.
Certain “important institutions” will also be required to disclose additional information contained in sub-paragraphs (d), (e) and (f) being their pre-tax profit or loss, their taxes paid and any public subsidies received by 1 July 2014.
The European Commission, pursuant to Article 89 must carry out a general assessment as regards potential negative economic consequences of the public disclosure. The European Commission comment that:
The purpose of this consultation is not only to receive views on any negative effects of disclosure, but also on the positive effects, so that a balanced picture of the consequences can be formed.
In particular, the European Commission are keen to understand the impact of the information to be disclosed under sub-paragraphs (d),(e) and (f). Should this disclosure not be deemed to be prejudicial all credit institutions and investment firms will have to disclose this information from 1 January 2015.
The UK is required to transpose CRD IV into national law and final guidance and Regulations (SI 2013/3118) which transpose the country-by-county reporting requirements under Article 89 CRD IV were approved by HM Treasury in December 2013.
Comments are invited until 12 September 2014.
Click for:
- Further information on the consultation and how to comment (link to European Commission website).
- Our previous UK Accounting Plus news item on HM Treasury Regulations and guidance.