Guest: Glimstedt Lawyer & Certified Tax Consultant, Gita Avotina;

Host: AGroup PR & Marketing Manager, Julia Kuznecova

Glimstedt is a well-recognized & leading law firm, which provides AGroup and respectively all HRB Portal users with all the necessary suite of legal and regulatory support in Latvia, Lithuania, and Estonia, ensuring full compliance with local legislation and proper conditions to make informed & confident decisions that work.

On 11 November 2021, the European Parliament gave the final approval on the EU Directive on public Country-by-Country Reporting (CbCR), formally known as the Directive of the European Parliament and the Council amending Directive 2013/34/EU as regards disclosure of income tax information by certain undertakings and branches.

In this episode Gita Avotina, Glimstedt lawyer & certified tax consultant answering the questions assumed, “If we refer to discrimination, it should be kept in mind that there shall be a principle of proportionality between interests of society and interests of individuals, in this case – companies. And we can see that by accepting this initiative public interests have been recognized to be justified, grounded and legitimate by implementing a particular approach. Furthermore, these proposals which have been implemented, have been discussed also with taxpayers, experts and this is generally acceptable concept for all involved parties. It continues the strategy of OECD BEPS 13 action plan, with one notable difference - publication of data. Therefore, Directive foresees transposition period for implementation and the first reportable year shall be only 2025 with reporting deadline December 2026. Thereby, there is a time limit provided for the companies to undertake actions for protection of their sensitive information. Furthermore, please note that a possibility to defer disclosing certain information for a limited period by providing reasoned explanation is foreseen. Which means that the publication of most important data can be deferred.”

Also, Gita Avotina considered, “There shall be a certain position result reached and discussions have shown that during more than a 5-year period this result (let’s say to this moment reasonable result) has been reached. If companies and society know that the information shall be published, so companies and all the society can get more “ready”, including transposition period, than simple publication (leakage) of data from companies internal databases. So, the main purpose of all this action is to ensure that companies’ profits are taxed in countries where these profits are generated.  General public as such can initiate proceedings for amendments in legislation, initiate administrative proceedings, but by the end – those shall be state institutions which shall make decisions, undertake particular actions towards taxpayers. Therefore, this publication of data is controlled. It’s in a legal framework.”

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