New EU rules requiring member countries to exchange information on multinationals’ tax affairs are have recently been introduced in a European effort to require corporations to be transparent and conduct business ethically.
The rules, agreed by EU finance ministers, are expected to be adopted formally by all 28 states and to come into force immediately.
However, they are unlikely to cover foreign companies until next year because some countries fear they would discourage inward investment. They follow growing concerns that tax avoidance by multinational companies such as Amazon could be costing EU countries 70 billion euro’s a year. Critics insist that income should be taxed in a country where it is earned.
The Netherlands finance Minister Jeroen Dijsselbloem, chairman of the EU ministers who product who produced the rules, said: “We reached a political agreement on co-operation between tax administrators, country by country reporting. This is part of our work on the anti-tax avoidance package” (Ethical Tax Planning).
Tax-dodging, which has been highlighted by the “Panama Papers” leak revealing how ultra-rich individuals hide wealth from the authorities, is now covered by new regulators, agreed by Britain, France, Germany, Italy and Spain at the International Monetary Fund spring meetings, information about the true owners of complex shell companies and overseas trusts will be shared automatically.
(Ethical Performance Journal, May 2016)
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