The charity Oxfam today welcomed a move by the EU Council in support of a proposal to require multinational companies to publish their income tax information. The proposal calls for multinationals to report publicly on what profits they make, how much taxes they pay and where they pay them. The Member States, the European Parliament and the Commission now have to agree on a text in the trialogue negotiations.
Member States will confirm their support for the proposal next week through a written procedure through an official vote, although not all states are in favor of the measure as today’s support comes after a five-year stalemate.
Chiara Putaturo, EU policy advisor on taxes and inequalities at Oxfam, responded to the news: “This agreement is an important first step towards greater transparency of corporate taxes, but it is not enough. For years, companies were allowed to evade their tax bills and shift profits from the public billions to tax havens. Multinational corporations must do their part to finance the recovery and show how they are using the billions of euros they have received in taxpayers’ money. ‘
Ms. Putaturo continued: “We urge Parliament and the Council to build on the current proposal with strict transparency rules. These rules must cover operations in all countries, not just EU countries. “
A statement from the charity outlines the proposed decision on behalf of the council and has some weaknesses, including:
- an obligation for companies to publicly report information from country to country only for their activities in EU Member States and certain third countries that have been identified but are not yet defined as tax havens.
- a “corporate get-out clause” that allows an exception for “economically sensitive information”.
- A reporting requirement only applied to companies with a consolidated annual turnover of more than EUR 750 million. This does not apply to 85 to 90 percent of multinational companies.
The statement went on to say that governments are cautiously estimated to lose US $ 245 billion in tax revenue annually due to corporate tax abuse by multinational corporations worldwide. Lower-income countries’ tax losses represent nearly 52 percent of their combined public health budgets.
Since the beginning of the COVID-19 pandemic, the European Commission has approved state aid totaling 3.1 trillion euros to companies in member states that are suffering from the economic effects of the COVID-19 crisis.
Photo of the European Week of Regions and Cities / Creativecommons.org CC BY-NC-SA 2.0