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    MEPs Urged to Close Loopholes on Tax Evasion After LuxLeaks, Panama Scandals

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    MEPs will, June 12, vote on proposals to stamp out multinational tax evasion following the Luxleaks, Panama Papers and Bahama Leaks scandals, but critics say the proposals leave too many loopholes.

    EU finance ministers in March agreed to make the largest corporations operating in the EU report their activities to tax administrations, in a system known as country-by-country reporting (CBCR). It follows a serious of rulings and investigations by the European Parliament and Commission.

    However, critics say the new tax arrangement — for multinationals with a total consolidated group revenue of at least US$847 million — will only involve passing tax information between member states' tax agencies.

    According to campaign group Transparency International, this obligation is limited to their operations in EU Member States and in a group of tax havens to be determined by EU governments. For the rest of the world companies would only be required to publish global figures, lumping together their data from all countries.

    ​Some MEPs have been are pushing to include all sorts of exemptions and opt-out systems for companies. In particular, they insist on maintaining a blanket exemption that would allow companies to avoid disclosing the required information if it is "seriously prejudicial to the commercial position of the undertaking".

    "This is simply not good enough. The European Parliament has an opportunity here to vote for real public country-by-country reporting. Anything short of real transparency will allow large companies to keep hiding crucial information, avoid taxes, and it will stifle competition, especially from SMEs who are not engaging in elaborate profit shifting schemes," wrote Elena Gaita, a policy officer for corporate transparency at Transparency International in an opinion piece for Euractiv.com.

    "After so many scandals and public outcries, it should be very clear for MEPs what they need to do to make a change: take a stand today and show that Europe can be a force for good by bringing transparency to the global financial system. Ensure that multinationals have to report their profits and taxes for everywhere they operate, so that we can all see where they are paying tax and where they are not," she wrote.

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    Tags:
    Bahamas Leaks, LuxLeaks, offshore tax havens, Panama Papers, tax haven, European Commission, European Parliament, Bahamas, Europe, Panama, Luxembourg
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