EU too slow to act on tax transparencyJuly 30, 2019
EU TOO SLOW TO ACT ON TAX TRANSPARENCY
The EU has been too slow to act on the urgent need for greater tax transparency, the Open Knowledge Foundation has warned.
The failure to update the international tax system has allowed businesses to move their profits and intellectual property around the world, often to locations where they pay the least tax.
This week it was reported that the makers of video game Grand Theft Auto has paid no UK corporation tax in ten years.
Tech giants such as Google, Amazon and Facebook are some of the most high-profile examples of companies using complicated tax structuring, but the problem is systemic.
Last week, a leak revealed how multinational companies have used Mauritius to avoid taxes in countries in Africa, Asia, the Middle East and the Americas.
Two years after the EU voted in favour of publishing public country-by-country reporting information as open data for all large corporations operating in Europe, the issue remains stuck in discussions at the EU Council.
The Open Knowledge Foundation is pushing for a variety of measures known as the ABCs of tax transparency:
A - automatic exchange of information where countries can more easily share tax data on individuals or businesses
B - beneficial ownership where the issue of opaque company ownership is addressed by publishing public registers of who owns or runs companies and trusts
C - country-by-country reporting where corporations would be required to publish details about the tax they pay, people they employ and profits they make in each country where they operate, to build up a better picture of their activities
Catherine Stihler, chief executive of the Open Knowledge Foundation, said: “The international tax system is broken and in need of urgent updating.
“We need greater transparency measures to shine a light on the practices currently being used by multinational corporations in order to crack down on abuses as exposed by investigations such as the Panama Papers and the Mauritius leaks.
“A lack of transparency in current country-by-country reporting standards will fail to build confidence in the treatment of corporations.
“The EU is acting too slowly when it comes to this vital issue. Incoming European Commission president Ursula von der Leyen and policymakers across the EU need to prioritise tax transparency as an essential strand of modernising the global taxation system to improve public trust and ensure corporate compliance.”
NOTES TO EDITORS
Gaming the Tax System (Taxwatch UK) https://www.taxwatchuk.org/reports/gaming-the-tax-system/
What Do They Pay? Towards a Public Database to Account for the Economic Activities and Tax Contributions of Multinational Corporations (2017 white paper published as part of the Open Data for Tax Justice project) http://datafortaxjustice.net/what-do-they-pay/
Opening the vaults: The use of tax havens by Europe’s biggest banks (Oxfam) https://www.oxfam.org/en/research/opening-vaults