The European Parliament and the Council have reached an agreement on Tuesday for a directive on fiscal transparency (CBCR for its acronym in English) that will oblige multinationals and subsidiary companies with revenues of more than 750 million euros for two consecutive years to publish what they pay in taxes in each member country.
This political agreement also includes the obligation for companies to publish how many full-time employees they have, their turnover and taxes paid, as well as all the profits and losses they have in each country in which they operate both within the European Union as in the countries included in the black and gray list of tax havens.
At the end of this Tuesday, the white smoke took place that put an end to five years of blockade since in 2016 the Juncker Commission presented this proposal in the heat of the scandal LuxLeaks. The agreement closes just as the six-month Portuguese presidency of the Council – which made Slovenia and Austria give their arms to twist – draws to a close.
Although since Eurochamber Calling for greater ambition in pursuing the trail of tax leaks to non-EU tax havens, negotiators have been satisfied to advance one of the main workhorses of the European project and at a time when that economies are struggling to overcome the effects of the pandemic crisis. That is: the search for resources with which to finance the recovery and minimize the leakage of important tax revenues both to countries outside the EU and to other member states.
50,000 million euros are lost
In January 2021, the European Parliament concluded that 6 of the 20 largest tax havens are EU countries, with two of the top five held by member states. ‘Corporate tax avoidance and aggressive tax planning by large multinational companies deprive EU countries of more than € 50 billion in revenue per year. These practices are facilitated by the absence of obligation for large multinational companies to report on where they obtain their profits and where they pay their taxes in the EU, country by country ”, he assured Pedro Siza Vieira, Portuguese Minister for Economy and Digital Transition.
Although it is not expressly mentioned in the statements, the technological giants, Amazon, Apple and Microsoft, among others, are the big target. This is recognized by one of the negotiators, Evelyn Regner (S&D, Austria): ‘Tonight’s agreement between the European Parliament and EU governments lays the foundation for greater tax justice, and this will ultimately force large multinational companies to publicly disclose where they make their profits and where they pay your taxes. This decision will also allow public scrutiny of known tax evaders such as Apple y Amazon».
‘The agreement is a milestone for tax justice in Europe. The fiscal transparency of each country is a sharp sword against tax avoidance. When large companies have to disclose their profits and taxes paid by country, fiscal dumping becomes visible to everyone every year ”, said Sven Giegold, MEP of the European Parliament of the Subcommittee on Tax Affairs.
However, since Oxfam They regret that the agreement has fallen short in several respects. In the NGO’s opinion, the text leaves escape routes for multinationals “since most of the real tax havens are not on the EU black list and they will not be reported separately.”
George is Digismak’s reported cum editor with 13 years of experience in Journalism