EU offers new plan to tackle corporate tax dodging
By Francesco Guarascio
BRUSSELS (Reuters) - Large companies would have to publicly disclose tax and financial data under proposals the European Commission put forth on Tuesday, in an effort to eliminate tax schemes costing European Union states billions of euros in lost tax revenues.
The EU executive's proposal is part of a broader plan to counter tax avoidance triggered by the LuxLeaks scandal in 2014, which exposed deals by multinationals with EU authorities to reduce their tax bills.
"By using complicated tax arrangements, some multinationals can pay nearly a third less tax than companies that only operate in one country," EU Financial Services Commissioner Jonathan Hill said in a statement. "Our proposal to increase transparency will help make companies more accountable."
A European Parliament study showed that corporate tax avoidance costs EU countries 50 billion to 70 billion euros in lost revenues every year.
The Commission had initially planned to impose so-called country-by-country reporting only for companies' activities in each of the 28 EU states.
But under pressure after the recent Panama Papers leaks, it made a last-minute change to its proposal, requiring corporations to disclose tax data also in jurisdictions deemed as tax havens - although EU states have never agreed on a common list of tax havens.
Corporate operations in the rest of the world will have to be reported as a single item.
The plan concerns only companies with an annual turnover of at least 750 million euros ($856.65 million) and with activities in the EU. Non-EU firms will also be required to publish a tax report if they have a subsidiary in an EU country. Continued...