Oxfam welcomes EU changes on Corporate Tax Transparency
Charity organization Oxfam today welcomed a move by the EU Council to support a proposal requiring multinationals to publish their income tax information. 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 text in ‘trilogue’ negotiations.
Member states will confirm their support of proposal with an official vote through a written procedure next week although not all states are in favour of the measure with today’s show of support coming after a five-year deadlock.
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.’
Ms. Putaturo went on to say, ‘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.’
A statement from the charity organization outlines the proposed decision on behalf of the Council 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.
The statement goes on to say that 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.
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.