The European Parliament today backed an EU law which will increase transparency in order to fight aggressive tax planning by big multinationals in Europe. Companies with an annual turnover over €750 million will have to communicate information about their taxes, profits and revenues to tax jurisdictions in every EU country in which they have business operations.

S&D Group negotiator and French socialist Emmanuel Maurel said:

"Country-by-country reporting between tax administrations in Europe is a necessary step in strengthening tax justice. EU member states will now be able to track the profits of multinationals and ensure that they are taxed in every country in which they are made. However, today's vote is also a missed opportunity. We deeply regret that the conservatives and liberals remained deaf to our call for increased tax transparency for a larger number of companies.  The conservatives are incoherent; a year ago, they had voted for public country-by-country reporting by including all multinationals with a turnover of over €40 million, but now, after the Panama Papers, they even fall short of their own position in 2015.

"The EU legislation will de facto exempt 90% of multinationals from the tax transparency requirement. That is why we have proposed to extend the rule to large undertakings with an annual turnover of more than €40 million and more than 250 employees. This change would have extended these requirements to 20,000 companies; as such our fight is not over. The Socialists and Democrats Group will keep fighting to change the threshold in the negotiations which aim at making the country-by-country reporting public.

S&D Group spokesperson on economic and monetary affairs, Elisa Ferreira, added:

"The overall agreement on the mandatory exchange of country-by-country information between tax administrations in Europe is an important tool to fight aggressive tax planning by big multinationals. The EU finance ministers have watered down the original proposal of the Commission. That is why we will fight to make public the information collected by the tax administrations. More progress will be needed in order to ensure a fairer tax system in Europe. In particular, we are calling for the establishment of a European blacklist of tax havens and sanctions against those who help companies to evade tax."

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Weekly update - 02/09/16