Legislation currently being drafted by the EU executive will force multinational companies, like Amazon, Google and Facebook, to make information about tax arrangements and profit available to the public, The Guardian reports.
Public country-by-country reporting is seen as needed since it otherwise become easier for large companies to make secret deals with governments on how they declare their profits.
- It will likely target the large multinationals, all multinationals and not just EU ones, said a source according to The Guardian.
Investigations in Several Countries
It has previously been revealed that some large companies, including Pepsi, Ikea and FedEx, had arranged special tax agreements with some EU countries in order to pay as little tax as possible. Several companies are now being subject to investigations, which may lead to them having to pay additional taxes.
The initiative of new legislation is being supported by John Christensen, executive director of Tax Justice Network. The Network is an activist group whose aim is to expose the systematic abuse of the international tax system, according to The Guardian.
- For a very long time big companies have been saying their tax affairs are a matter of competitive confidentiality. We think it is incredibly important as a matter of principle that this information is made public, he said.
It will be decided in April if the new tax law will go through or not. In order for the EU to decide on changing the legislation, a sufficient number of EU governments have to be in favour of the proposition.