PWYP Norway has sent a letter to the Norwegian Ministry of Finance, and asked for clarification regarding the new regulation on country-by-country reporting.
"PWYP Norway has monitored the process for several years. We are very keen to ensure that the law functions and that it is as concrete, purposive, effective, simple and reasonable as possible."
This sentence introduces the letter from PWYP Norway to the Ministry of Finance. On the 20th of December 2013, the ministry issued new regulation with regards to the new law on country-by-country reporting. The legislation was passed in Parliament on the 5th of December.
PWYP Norway has detected four weaknesses in the phrasing of the regulation, these can accommodate avoidance by the companies.
PWYP Norway therefore asks the ministry of Finance to clarify these points, in writing:
1. The regulation does not demand all costs to be reported, only purchases of goods and services. PWYP Norway notes that "If full costs are not apparent from country-by-country reports, it would appear as though the Ministry of Finance is consciously introducing ineffective regulations which do not allow profits per country (revenue minus costs) to be seen." PWYP Norway asks whether the Ministry of Finance wants the total costs to be reported country by country, if not, PWYP Norway requests a statement of reasons for this decision.
2. PWYP Norway has continuously emphasized that the reporting standard is only credible if it requires a connection to audited numbers. The new law seems to require companies to report according to financial figures, we ask the Ministry of Finance to confirm that this is correct and that this is the interpretation that companies must apply when making reports.
3. The regulation has adopted a formulation specifying that a “consolidated overview” must be prepared, PWYP Norway finds this unsettling. Does this imply that companies must prepare two sets of group accounts – one set of group accounts for the overall upstream operation and one set of group accounts containing consolidated figures for the purposes of the country-by-country report? If the latter interpretation is correct, the report will not cover all upstream activities.
4. The regulation provides the companies with three opportunities to except subsidiaries from the reporting. PWYP Norway asks the Ministry of Finance to ensure that the opportunity to make exceptions is removed.
Read the letter translated to English: