Bigger companies: EU countries pave the way for greater tax transparency – economy

Bigger companies: EU countries pave the way for greater tax transparency - economy

Brussels (DPA) – EU high-turnover companies have a responsibility to achieve greater tax transparency in the future.

A majority in a video conference of national finance ministers indicated that they had approved a plan to provide tax authorities with additional information about corporate structures along the border.

Public Country-by-Country-Reporting (CBCR) states that companies with a turnover of more than 50 750 million per year are obliged to disclose information about their profits and taxes. Through country-specific reports for multinational companies and their automatic exchanges, tax authorities need to be able to scrutinize them better – so tax evasion should be more strongly resisted. The move was welcomed by NGOs and criticized by business associations.

No formal decision has been taken as ministers and their representatives visited only on video conference on Thursday. However, there are plans to do this as soon as possible and to formally give the green light to negotiations with the EU Parliament, which are still needed.

Vice Chancellor Olaf Scholes (SPD) blamed Germany for not speaking publicly in support of the plan in this way at the conference. “It is a shame that all the people of Germany had to abstain from voting because our coalition partner did not want to take this step towards greater tax transparency,” he said. From the CDU-led Ministry of Economic Affairs, the tax authorities said they were confident that the information was already available as such information had already been used.

There are also different legal understandings within the EU: some EU countries, such as Luxembourg, Malta, Cyprus and Ireland, argue that solidarity must exist because it is about tax policy. On the other hand, the majority of countries and the European Commission are of the view that transparency is at stake and that tax laws will not be changed directly. So a qualified majority is enough.

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There is criticism from business associations. The Association of Automotive Industries fears that sensitive company data will become public. The Federation of German Industries (BDI) talks about “significant competitive shortcomings” for European companies.

In the view of the Foundation for Family Business, a public CBCR before the European Court of Justice “will be exposed to aggression because of the disproportionate interference in data protection and the legal basis of the decision.” Social Democrats and green European politicians celebrated the decision. Green economist Sven Geegold tweeted: “This is a huge victory against tax evasion.”

© dpa-infocom, dpa: 210225-99-594854 / 2

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