EU forcing companies to increase tax transparency

After five years of tough negotiations, representatives of the EU states and the European Parliament have agreed on new legislation that will force large multinational companies in the EU to disclose their profits and tax payments. The measure is aimed at boosting tax transparency. Is this a major breakthrough on the path to more fair taxation?

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Les Echos (FR) /

The parliament's clever manoeuvre

The new transparency rules also represent a political breakthrough, business paper Les Echos writes in delight:

“The MEPs in Brussels have been fighting for the issue for almost a decade, against opposition from governments. They got around the obstacle by classifying the directive as an accounting rather than a tax matter, thus avoiding the need for a unanimous decision. But let there be no mistake: public pressure is the most powerful lever for changing the situation. It already forced Luxembourg to lift banking secrecy in 2015. And it could push Ireland to accept a global minimum tax and a digital tax. ... Resistance continues, but this tax revolution seems to be truly underway now.”

taz, die tageszeitung (DE) /

The fight has just begun

For the taz, the EU's commitment to tax justice still leaves much to be desired:

“So far, the Europeans have been laggards rather than drivers when it comes to tax policy. The tone is once again being set by the US, which under its new president Joe Biden is showing how progressive economic and financial policy works. Biden is fighting for a global minimum tax on corporations; a 15 percent tax rate is currently under discussion. But of all countries it is EU ones like Ireland (with its 12.5 percent tax rate) that are hitting the brakes. The fight for more tax justice is not over yet. It has only just begun.”

La Libre Belgique (BE) /

United front also needed on digital tax

Ahead of the meeting of G7 finance ministers in London today, US President Joe Biden has lowered his proposal for a global minimum corporate tax rate from 21 to 15 percent. Europe should demonstrate as much unity on this issue as it is on tax transparency, La Libre Belgique advises:

“Of course, Europe should not go along with everything in these negotiations. The Americans have always wanted a global minimum tax rate. But Donald Trump was not prepared to accept its counterpart: a tax on Google, Facebook, Apple, Microsoft and the like. Joe Biden has made a gesture to unblock the impasse in international negotiations. Europe must now make sure that this gesture is sufficient. The 27 must be allowed to introduce their own digital tax without risking retaliation from the US.”