Fighting against tax avoidance and aggressive tax planning is a political priority for the European Commission. Since the beginning of its mandate, the Juncker Commission has pursued an ambitious agenda to ensure fair taxation, meaning that companies should pay their fair amount of taxes in the country where they generate their profits.
Today, in its weekly meeting, the Commission proposed public tax transparency rules for multinationals on a country-by-country basis. The proposal builds on the Commission's work to tackle corporate tax avoidance in Europe, estimated to cost EU countries EUR 50-70 billion a year in lost tax revenues.
Once adopted by the Council and the European Parliament, the new rules will apply to the approximately 6.500 largest companies operating in the EU with global revenues exceeding EUR 750 million a year without damaging their competitiveness and without affecting small and medium sized companies.
Today's proposal will amend the Accounting Directive (Directive 2013/34/EU) to ensure that large groups publish annually a report disclosing the profit and the tax accrued and paid in each Member State on a country-by-country basis. This information will remain available for five years. Contextual information (turnover, number of employees and nature of activities) will enable an informed analysis and will have to be disclosed for every EU country in which a company is active, as well as for those tax jurisdictions that do not abide by tax good governance standards (so-called tax havens). The proposal therefore also addresses concerns flowing from the Panama Papers.
The same rules would apply to all multinationals doing business in Europe. In addition, companies would have to publish an aggregate figure for total taxes paid outside the EU.
Source: European Commission