The proposed changes to the Accounting Directive will require large multinational enterprises (those with a worldwide consolidated net turnover of more than €750 million) to produce a public report containing information on the enterprise's tax affairs. It is proposed that this information should be disaggregated so that information is presented separately for the following.

1. Each EU member state in which the enterprise operates.
2. Individual countries outside the EU which 'refuse to respect good governance standards in taxation and pose specific tax challenges' i.e. tax havens.
3. Other non-EU countries, on an aggregated basis.

• the nature of the enterprise's activities in that country;
• the number of persons employed by the enterprise in that country;
• the net turnover made (including with related parties) in that country;
• the profit made before tax in that country;
• the amount of income tax due in the country as a reason of the profit made in the current year; and
• the actual payments made to the country's treasury during that year, and the amount of accumulated earnings.

It is also proposed that, where a multinational operates in the EU but is not headquartered here, this reporting obligation will fall on its subsidiaries or branches in the EU, unless the non-EU parent chooses to report this information for the group as a whole.

The information content of this proposed new report and the scope of entities to which it applies are similar to the rules on country-by-country reporting to tax authorities, which were recently brought into force by HMRC in the UK.

The press release and proposed directive can be obtained from the EC website.