The European Union finds a political agreement to strengthen the tax transparency of multinationals

The European Union finds a political agreement to strengthen the tax transparency of multinationals

The agreement aims in particular to oblige the large groups to declare their profits in each of the countries of the European Union where they operate.

The President of the European Council, Charles Michel, during a meeting with the Presidents of the European Commission and of the Eurogroup, on June 1, 2021. (FRANCOIS WALSCHAERTS / AFP)

MEPs and the European Council, which represents the member states of the European Union (EU), reached political agreement on Tuesday June 1 on a new directive to strengthen the tax transparency of multinationals. This agreement provides that large groups whose annual turnover exceeds 750 million euros will be required to declare their profits, number of employees and the amount of their taxes in each of the EU countries where they operate, as well as in jurisdictions appearing on the blacklist of Union tax havens.

The obligation to “Public reporting country by country” has been hailed by several political groups in the European Parliament, including the Social Democrats and the Greens, as important progress for more tax justice. But many NGOs and the radical left have voiced criticism, deeming this proposal “Inoperative”.

The agreement on a new directive, ifollowing a proposal from the European Commission presented in 2016, dIt still needs to be formally approved by MEPs in plenary session and by the European Council. It comes as discussions at the Organization for Economic Co-operation and Development (OECD) over taxing the profits of multinationals have been revived by a proposal by US President Joe Biden to introduce a minimum tax rate of 15%.