EU member states have agreed on a legislative proposal that requires multinationals to disclose their profit figures and how much tax they pay in each European country in which they operate. The rule should prevent tax avoidance.
The European Commission’s tax transparency bill dates back to 2016, but was blocked by a group of EU countries, including Germany.
MEP Bas Eickhout (GroenLinks): “Multinationals have been getting away from the tax Dance for years and his master in covering it up. With this law, everyone can see how much, or how little, tax big companies pay in every country where they operate, so that the shift can be tackled with profits.”
Public country-by-country reporting is currently only applicable in the EU. For countries outside the EU, companies do not have to break down the amounts by country. According to development organisation Oxfam, which speaks of” a breakthrough”, and Transparency International, the bill should therefore be tightened up.
The member states have yet to formally ratify the agreement, but then they will negotiate the final law with the EU Parliament and the commission.