Transparency Crackdown

E.U. Law to Target Corporate Tax Avoidance

European Commissioner Pierre Moscovici is due to unveil the E.U.'s initial tax transparency plans this week.
  • Why it matters

    Why it matters

    If passed, the new law will require companies to declare tax and earnings liabilities in the countries where profits have been made, closing an international loophole.

  • Facts


    • The E.U. hopes to have a draft of the new law by early summer.
    • The move is part of a wider E.U. crackdown against multinationals that have long avoided paying much of their corporate tax bill.
    • German Finance Minister Wolfgang Schäuble says the proposals call for too much transparency and could damage the economy.
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The European Commission is planning to put forward a draft law that could force companies to publicly release their earnings and tax liability for each country in which they operate.

The European Union’s executive arm, which wants greater transparency from large corporations, aims to present its proposals in the early summer, high-ranking E.U. sources told Handelsblatt.

With this duty of disclosure, the Commission hopes to pressure multinational corporations into paying tax in the same countries where they make their profits.

The move is part of a wider crackdown by the European Union and other countries on multinationals that have long avoided paying much of their corporate tax bill by exploiting international loopholes.

On Thursday, E.U. Commissioner Pierre Moscovici will present the first outline of a new E.U. law on curbing tax avoidance. The legislation will implement part of an “action plan” for wealthy countries that was drawn up by the Organization for Economic Cooperation and Development, the OECD.

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