Luxembourg has successfully spearheaded an effort to block a draft bill that would force multinational companies to publish where they pay taxes and make profits.
The new reporting rules were proposed three years ago to crack down on tax dodging after the Panama Papers scandal broke.
Tax-dodging companies deprive national coffers of between €50 billion and €70 billion a year, the European Commission said when laying out the so-called public country-by-country reporting directive (CBCR), which would target companies with global revenues exceeding €750 million a year.
But Luxembourg, Cyprus, Ireland and Malta were among 12 governments to torpedo the draft plans at a meeting of EU industry ministers in Brussels.
That opposition was large enough to deny the bill the qualified majority it needed to pass Thursday’s vote. A successful outcome would have kickstarted talks with the European Parliament to find a final compromise legal text.
Luxembourg and the other opposing countries argued the bill could upset global talks to develop a digital tax. They also maintained the plans should only be handled by finance ministers — not by the industry and employment chiefs present at Thursday’s Competitiveness Council session, which handles policies related to the EU internal market and industry.
Finnish Employment Minister Timo Harakka, who chaired the negotiations under Helsinki’s six-month Council presidency, didn’t buy the argument.
He said he was also far from shocked that the four countries, which anti-poverty NGO Oxfam earlier this year accused of being tax havens, were a part of Thursday’s opposition.
“No one is surprised that Luxembourg, Malta, Cyprus and Ireland are among those that oppose this motion,” Harakka said in an interview following the meeting. “Ironic is hardly the word.” [...]
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