The EU has moved to force multinational companies to publish a breakdown of the tax they pay in each of the bloc’s member states and in tax havens.
Country-by-country reporting is designed to shine a light on how some of the world’s biggest companies avoid paying an estimated $500bn a year in taxes by shifting their profits from higher-tax countries such as the UK, France and Germany to zero-tax or low-tax jurisdictions including Ireland, Luxembourg and Malta.
A majority of EU countries backed legislation at a meeting of ministers on Thursday, in what campaigners said was a “landmark” moment, five years after the regulation was first proposed.
Negotiations will now open with the European parliament, which wants to broaden the scope of the regulation. MEPs want multinationals to make public their profits and tax paid in any country, rather than just member states or a blacklist of EU tax havens, as the price for operating in the bloc.
At a meeting of ministers on Thursday, Germany, Ireland, Luxembourg, Malta, Sweden, Czech Republic, Hungary and Cyprus had again sought to block the proposal by voting against it or abstaining.
A breakthrough was achieved, however, when Slovenia and Austria joined Finland, Greece, Denmark, Estonia, Romania, Poland, Netherlands, Italy, Spain, France, Bulgaria and Belgium in supporting it.
The decision by the member states to move forward with the proposal, was celebrated by senior MEPs who have campaigned for reform. Sven Giegold, the financial and economic policy spokesperson of the Greens group in the European parliament, said he hoped the move would put pressure on the UK to follow suit.
“I am happy to say that we got great support today, by a large majority of member states,” Portugal’s minister of economy and digital transition, Pedro Siza Vieira, said after the meeting. “We still have a few steps to take in the legislative process, but we can take these steps quickly.”
This article is part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. This article reflects only the author’s view. The European Parliament is not responsible for any use that may be made of the information it contains.