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8 Feb, 2016 11:38

EU plan may force Google, Facebook, Amazon to disclose taxes & profits

EU plan may force Google, Facebook, Amazon to disclose taxes & profits

Google, Facebook, Amazon and other large multinational firms may soon be forced to publish their tax bills and earnings under new EU legislation.

The draft legislation, which is due to be tabled in April by the European Commission, would require the world’s largest multinationals to publically disclose their profits and the amount of tax they pay in each country they operate in, sources told the Guardian.

The revenue threshold for firms has not yet been established, however sources told the paper the rules would only apply to large global multinationals.

An impact assessment of the proposed legislation is nearing completion, the paper reports.

The assessment “really swayed opinion” inside the commission in favor of public reporting, a source told the paper.

European Commission President Jean-Claude Juncker is said to be in favor of the plan.

News of the legislation has been welcomed by tax reform campaigners.

“For a very long time big companies have been saying their tax affairs are a matter of competitive confidentiality,” Tax Justice Network Executive Director John Christensen said.

“We think it is incredibly important as a matter of principle that this information is made public.”

Tax deals struck between foreign multinationals and European governments have become a hot topic in Europe.

The UK government recently came under fire after striking a deal with Google that would require the internet giant to pay £130 million ($189 million) in back taxes, a figure critics say is much too low.

Google, like other similar large firms across Europe, is funneling its international revenue through Dublin to benefit from Ireland’s 12.5 percent tax rate. For comparison, UK corporation tax is 20 percent and France’s is 33.33 percent.

READ MORE: Apple, Facebook & Amazon multi-billion 'Double Irish' tax loophole closed

EU states feel individual sweetheart tax deals between firms and governments offer an unfair competitive advantage for attracting business and investments.

The EU is also conducting probes, led by commissioner for competition Margrethe Vestager, into tax deals struck by Apple in Ireland and Amazon in Luxembourg.

The commission ruled in October that Luxembourg and the Netherlands violated EU rules by striking sweetheart tax deals with Fiat and Starbucks, respectively. The two firms were ordered to pay €30 million ($33 million) each in unpaid taxes.