The fight against tax avoidance continues. Two EU Directives from 2016 (the so-called Anti-BEPS Directive and the Amendments to the Money Laundering Directive) already prescribe an automatic exchange of information between Member States. Now a Directive on publicly accessible profit tax information is being prepared. On Monday this week, Evelyn Regner and Hugues Bayet, the assigned rapporteurs of the S&D group, have presented an aggravated version of the text proposed by the Commission, which is now debated in Parliament.

This new Directive aims at deepening country-specific reporting and at strengthening the social responsibility of companies. In doing so, it repeats the key demand of previous initiatives: companies should pay taxes in those countries, where their profits are generated. The now debated Parliament proposal goes further: it demands that information need to be accessible not only to tax authorities, but also to employees and the general public. The Commission proposes to demand these disclosure obligations in accordance to OECD-BEPS Regulations from multinational companies with an annual turnover of at least 750 million euros. However, this would imply that only 10 to 15 percent of the highest-grossing companies would be affected. Hence, the proposal by Regner and Bayet wants to lower the minimum turnover to 40 million euros – a threshold value, which is also provided for in the Accounting Directive and which ensures at the same time that small and medium-sized companies, which engage in cross-border activities, are not affected by the Directive.

In contrast to the Commission proposal, the version, which is now debated in Parliament, opposes the idea that only companies, which are active in the EU or in tax oases (previously classified as such), have to disclose their activities. Instead, information of these multinational companies shall be available in all legal spaces in order to result in more global transparency and control, to support countries in the Global South to generate their related tax revenues. It remains to be seen whether this version of the proposal, which is to be welcomed from an employees' perspective, will be adopted by the Parliament. The suggested lowering of the minimum turnover and the extension of the reporting duty to all states, in which these companies are active, have already been met with some opposition in the Committee meeting.

From the AK’s point of view, further action against tax avoidance is urgently necessary; if big companies do not pay taxes in the country, where their profits are generated, the state loses billions of tax revenue. This revenue, however, is crucial to sustain public spending in labour market policies and infrastructure, social services, education and health systems. Therefore, the AK , the ÖGB and other supporting associations have launched the No to tax havens campaign, which can be supported here.

Further information:

Anti-BEPS Directive

Amendment to the Money Laundering Directive

EC: Measure to combat tax avoidance by companies

BAK Europa: Fight against tax avoidance