UK charities have condemned the European Commission’s new proposals intended to crack down on tax dodging corporations as simply being ‘business as usual’.
The proposed rules would require multinationals with revenues above £595 million (€750 million) to publicly disclose profits made and taxes paid in either the EU or in a (yet-to-be-compiled) list of designated tax havens.
However, campaigners who have called for country-by-country reporting, say the limited plan will allow tax evaders to simply bring their affairs to countries not included on the list “which is a recipe for dodgy business as usual”, warned Christian Aid tax justice expert, Toby Quantrill.
“The Commission’s proposal only requires reports for EU member states and countries on what is likely to be an arbitrary list of tax havens,” said Oxfam’s EU tax policy advisor, Aurore Chardonnet.
“As long as the proposal doesn’t cover all countries, multinational corporations will still have plenty of opportunities to hide their profits,” Eurodad tax justice coordinator Tove Ryding pointed out. “So instead of solving the problem, this proposal would be moving the problem from one country to another.”
The proposed legislation must still be passed by the European Parliament and the European Council and, if successful, doesn’t take effect until 2018.
Some called the Commission’s attempt at regaining the public’s trust in light of last week’s Panama leaks a wasted opportunity.
“The European Commission has an opportunity to lead the way on corporate transparency, so it’s disappointing that their proposal fails to include global public country-by-country reporting for companies doing business in the EU“, said the Transparency Coalition’s lead EU advocate, Koen Roovers.
“Instead they settled for a half-hearted hybrid that would keep most of the world in the dark”, Roovers added.
The new proposals come a week after the massive Panama Leaks scandal in which multiple world leaders were called out for alleged tax avoidance.
British Prime Minister David Cameron has been on the receiving end of increasing criticism after he admitted to profiting from his father’s offshore trust.