EU company tax reporting proposal is missed opportunity | ActionAid UK

EU company tax reporting proposal is missed opportunity

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ActionAid believes the European Commission proposal for international company tax reporting will fail to tackle corporate tax avoidance for three key reasons:

  1. Only companies with a turnover in excess of €750 million will have to report — meaning only the very largest companies will have to do anything new
  2. Companies will only have to report tax payments for EU countries and an as yet unknown list of tax havens — if multinationals want to hide tax avoidance they can shift profits into countries and tax havens that aren’t included on the list.
  3. Without full public disclosure of corporate tax information around the world campaigners in the world’s poorest countries will be unable to access the information they need to tackle tax avoidance. 

Diarmid O’Sullivan, ActionAid Tax Policy Adviser, commenting on the European Commission’s corporate tax reporting proposals, said:

“The Commission’s proposal is a huge missed opportunity which falls far short of what is needed to stop multinationals hiding tax dodging behind opaque corporate structures. David Cameron should push the EU to go further and act at home to tackle the UK’s overseas tax havens. 

“The proposed threshold for reporting is so high that most big companies won’t have to report. Worse still, the reports won’t cover every country where companies do business, only EU countries and a still-to-be-agreed list of tax havens which is likely to be based on political compromises. If multinationals want to hide tax avoidance, all they will have to do is shift profits into countries and tax havens that aren’t included on the list. 

“Under the current proposals citizens, journalists and campaign groups won’t get the information they need to scrutinise multinationals’ global tax affairs, and there’s no assurance that the world’s poorest countries will be able to get the information they need either.

“David Cameron should push for the proposal to be strengthened by ensuring that it covers all large multinationals operating within the EU, and requires them to publish tax payments for all countries where they do business. At home the Prime Minister should use the upcoming tax and anti-corruption summit to honour his promises and demand that the UK’s overseas tax havens publicly reveal who owns the countless shell companies registered there. Only this will help ensure that developing countries do not see tax revenue desperately needed to fight poverty disappearing into UK-linked tax havens.”

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