After almost five years of deadlock, EU governments in the Council finally backed new EU rules on corporate tax transparency today. The proposal requires multinationals to publicly report on what profits they make, how much tax they pay, and where they pay it. Member states, the European Parliament and the Commission will now have to agree on a compromise text in ‘trilogue’ negotiations.
Reacting to the news, Chiara Putaturo, Oxfam’s EU Policy Advisor on Tax and Inequalities, said:
“This agreement is an important first step towards greater corporate tax transparency, but it is not enough. For years, corporations were allowed to dodge their tax bills and shift billions in profits to tax havens, out of the public eye. Multinationals need to play their part in funding the recovery and show how they are using the billions of euro they received in taxpayer money.
“We urge the Parliament and Council to build on the current proposal with strong transparency rules. These rules must cover operations in all countries, not just those in EU countries.”
Notas para editores
Today, the majority of member states in the Competitiveness Council supported a proposal requiring multinationals to publish their income tax information. Next week, member states will confirm their support with an official vote through a written procedure.
The European Commission in 2016 sent a draft text to the European Parliament and Council in the wake of the Luxleaks scandal. The European Parliament passed the file to the Council in July 2017.
According to Oxfam’s and other CSOs’ analysis, the Council’s compromise has some weaknesses including:
-
an obligation for companies to publicly report information on a country-by-country basis only for their operations in EU member states and certain third countries identified but yet to be defined as tax havens.
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a “corporate-get-out-clause” allowing a reporting exemption for “commercially sensitive information”.
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a reporting requirement applied only to companies with an annual consolidated turnover above EUR 750 million. This will exclude 85 - 90 per cent of multinationals.
According to conservative estimates, Governments lose $245 bn in tax revenue annually due to corporate tax abuse by multinationals worldwide. Lower-income countries’ tax losses are equivalent to nearly 52 per cent of their combined public health budgets. Luxembourg, at the centre of the #Openlux scandal, attracts an estimated $66bn in profits artificially from multinationals each year.
Since the start of the COVID-19 pandemic, the European Commission has approved €3.1 trillion in state aid to companies in member states suffering from the economic hit of the COVID-19 crisis.
Información de contacto
Jade Tenwick | EU Media Officer | jade.tenwick@oxfam.org | +32 473 56 22 60
Today, the majority of member states in the Competitiveness Council supported a proposal requiring multinationals to publish their income tax information. Next week, member states will confirm their support with an official vote through a written procedure.
The European Commission in 2016 sent a draft text to the European Parliament and Council in the wake of the Luxleaks scandal. The European Parliament passed the file to the Council in July 2017.
According to Oxfam’s and other CSOs’ analysis, the Council’s compromise has some weaknesses including:
-
an obligation for companies to publicly report information on a country-by-country basis only for their operations in EU member states and certain third countries identified but yet to be defined as tax havens.
-
a “corporate-get-out-clause” allowing a reporting exemption for “commercially sensitive information”.
-
a reporting requirement applied only to companies with an annual consolidated turnover above EUR 750 million. This will exclude 85 - 90 per cent of multinationals.
According to conservative estimates, Governments lose $245 bn in tax revenue annually due to corporate tax abuse by multinationals worldwide. Lower-income countries’ tax losses are equivalent to nearly 52 per cent of their combined public health budgets. Luxembourg, at the centre of the #Openlux scandal, attracts an estimated $66bn in profits artificially from multinationals each year.
Since the start of the COVID-19 pandemic, the European Commission has approved €3.1 trillion in state aid to companies in member states suffering from the economic hit of the COVID-19 crisis.
Jade Tenwick | EU Media Officer | jade.tenwick@oxfam.org | +32 473 56 22 60