BERLIN – Germany's finance minister on Wednesday welcomed an agreement requiring large companies in the European Union to reveal how much tax they paid in which country.
The deal late Tuesday between representatives of the EU's 27 nations and the European Parliament ends five years of haggling over country-by-country reporting rules for corporations with total consolidated revenue of more than 750 million euros (currently about $917 million) across more than one country in each of the past two consecutive financial years.
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Among the companies affected will be major international corporations such as Google and Amazon, which have used entities in low-tax countries such as Ireland and Luxembourg to reduce their tax burden elsewhere.
“This is a huge step for greater tax justice,” German Finance Minister Olaf Scholz said.
“The new rules create greater transparency so that international corporations can't wiggle out of their tax obligations,” he added. “There needs to be an end to dirty tax tricks finally.”
The European Union estimates that tax avoidance measures by large companies costs the bloc more than 50 billion euros ($61 billion) each year.
Some campaigners lamented that the deal, which still needs to be formally approved, only requires companies to provide detailed figures on their tax payments in the EU and almost two dozen non-EU countries on the bloc's of 'black' or 'grey' lists of uncooperative tax havens.
Chiara Putaturo of the aid group Oxfam said the agreement allows companies to obscure how much tax they're paying in three-quarters of the world's countries, including jurisdictions such as Bermuda, the Cayman Islands and Switzerland.
Similar legislative efforts to require country-by-country reporting of corporate taxes are underway in the U.S. Congress.