The Danish Presidency has on June 21 reached a general approach in the Council on the accounting directives. Thereby the Council has taken an important step closer to reducing administrative burdens for especially small businesses and strengthen transparency of payments.
Minister of Business and Growth, Ole Sohn:
“With this new disclosure requirement on country-by-country reporting in the accounting directives, citizens in resource rich countries can get information on what payments their governments receive from large or listed companies for the primary extraction of natural resources. With this information the civil society can keep their governments responsible for the use of this income. It will be an important step to increase transparency and reduce misuse of public money and corruption.”
The objective of the proposal is to reduce the administrative burdens for small businesses and enhance the transparency and comparability of the accounts for European businesses. The proposal also contains a new disclosure requirement – a so called country-by-country reporting - for listed and large companies with activities within the extracting sector of oil and minerals and within foresting. These companies must report on payments (taxes, licenses, royalties e.g.) to foreign governments. The objective of payments to government is to strengthen transparency and thereby fight corruption, misuse of public money and illegal capital flight from countries rich on resources.
The accounting directives were presented by the Commission in October 2011 and are one the key initiatives in the Single Market Act.