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12 EU countries block corporate tax disclosure rule

Publish date: 02 December 2019
Issue Number: 4837
Diary: Legalbrief Today
Category: Corporate

Twelve EU countries, including Ireland, have blocked a proposed new rule that would have forced multinational companies to reveal how much profit they make and how little tax they pay in each of the 28 member states. According to a report in The Guardian, the proposed directive was designed to shine a light on how some of the world’s biggest companies – such as Apple, Facebook and Google – avoid paying an estimated $500bn a year in taxes by shifting their profits from higher-tax countries such as the UK, France and Germany to zero-tax or low-tax jurisdictions including Ireland, Luxembourg and Malta. Ireland is one of the biggest beneficiaries of the current rules. The country hosts corporate offices that collect revenue and profits generated by many multinational companies across the EU bloc. Ireland allows global technology companies to pay corporation tax at rates as low as 6.25%, compared with 19% in the UK. The Irish Fiscal Advisory Council warned last week that the country’s economy has become so reliant on taxes paid by multinationals that half of all of corporate taxes paid in the nation come from just 10 global companies. The firms are not named, but they are believed to include US technology giants Apple, Facebook, Microsoft, Dell, Google and Oracle. Elena Gaita, a senior policy officer at anti-corruption charity Transparency International, said: ‘It’s an outrage that member states have once again put the interests of big business above those of citizens.’

Full report in The Guardian