Irish development organisations have dismissed the European Commission’s latest attempt to crackdown on global tax avoidance as a “woefully inadequate” token gesture.
Under the proposals put forward by the Commission, large companies would have to publicly disclose tax and financial data in an effort to eliminate tax schemes costing EU states billions of euro in lost tax revenues.
Companies will have to report their activities individually in each member state as well as in a number of jurisdictions deemed as tax havens.
The plan only concerns companies with an annual turnover of at least €750m and with activities in the EU.
Non-EU firms will also be required to publish a tax report if they have a subsidiary in an EU country. The commission’s announcement has been greeted with derision by Oxfam Ireland and Christian Aid, however.
Oxfam said the proposal which limits public country-by-country reporting to the EU and “an arbitrary list of tax havens” makes it impossible to effectively monitor tax practice. It also criticised the proposal for limiting its scope to a small number of companies and for limiting the type of information required from them.
“This selective tax transparency proposal will leave most of the world still in the dark about corporate tax arrangements and lacks the teeth required to address the type of industrial-scale tax dodging exposed in recent scandals,” said Oxfam Ireland chief executive Jim Clarken.
Sorley McCaughey, head of advocacy and policy with Christian Aid, described the proposals as “woefully inadequate” and “cack-handed”.
He suggested the proposals may have the effect of encouraging companies to redirect their profits into tax jurisdictions not included on the commission’s list.
The commission described the proposal as “a simple, proportionate way to increase large multinationals’ accountability on tax matters without damaging their competitiveness”.
The rules will apply to thousands of large firms operating in the EU, without affecting small and medium-sized companies, a spokesperson added.
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