The EU is urging big companies to disclose the tax bills paid in each country where they operate in order to reduce tax avoidance among multinationals.
The European Commission's official in charge of drafting
business regulation Michel Barnier says the authorities have
already oblige banks to report their profits, taxes and subsidies,
and starting from 2015 it will apply to other big companies,
reports Reuters.
"We will expand these reporting obligations to large companies
and groups," he said on Thursday.
The move was triggered by the revelation of tax avoidance schemes
by Apple and other major international businesses. Governments have
been complaining that corporate tax avoidance has become a serious
international problem.
This week the US Senate issued a report on its investigation into
Apple's tax avoidance schemes. In the report the Senate accuses
Apple Inc. of shielding around $74 billion in taxes via a complex
web of subsidiaries that were tax residents in no country.
CEO Tim Cook denied all the accusations, saying the company
contributes a lot to the US economy and has said Apple complies
with the spirit and the letter of the law.
"We don't depend on tax gimmicks," Cook told a Senate
Subcommittee hearing. "We don't stash money on some Caribbean
island."
Apple is not the only big company that has faced tax disputes.
Google, Starbucks and Amazon are under scrutiny of the UK
government which is currently checking their tax integrity.
Starbucks pledged to pay an extra £20 million in UK tax last
year.
Governments have displayed a clear intention to force big
businesses to report profits. Earlier this year the EU agreed to
force European banks to report on a country-by-country basis. The
US and the EU have also agreed to oblige mining and oil companies
to publish tax and other payments to resource rich nations, to
reduce corruption, Reuters reports.