The European Commission on 12 April 2016 presented a legislative proposal that seeks big firms (around 6000) operating in European Union to publish tax-related information on their websites.
In its efforts to crack down on corporate tax evasion, the commission wants to draw a blacklist of tax havens. The proposed directive is needed to make companies more accountable and to create a fairer competition between companies regardless of their size.
Major highlights of the proposal
• The proposal would require companies with an annual turnover of some 750 million Euro or more to reveal the income tax they pay inside the European Union on a country-by-country basis.
• They will have to publish, the nature of the activities, number of employees, total net turnover, profit made before tax, amount of income tax due, and amount of tax paid and accumulated earnings, on their websites.
Since last 18 months, the EU commission was working on the same proposal but amended it soon after the leak of 11 million documents from Panamanian law firm Mossack Fonseca.
The leaks, known as the Panama Papers, have provided broad insight into how the global elite avoid paying their fair share into the public coffers.
As per report, the European Union annually loses up to 70 billion Euros because of corporate tax avoidance. Big firms in high-tax countries also pay on average 30 percent less tax when compared to smaller companies.
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