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ROUNDUP: EU Parliament approves tougher tax rules for large companies

BRUSSELS (dpa-AFX) – Large corporations in the European Union will have to make public how many taxes they pay in each state. The European Parliament approved a law on Thursday that aims to expose corporate tax-saving models. “It should be clearly disclosed in large international companies where, in which country, they generate profits and where accordingly they are obliged to pay taxes,” said MEP Evelyn Regner (S&D, Austria), who is responsible for parliament Negotiated.

In June, after a five-year dispute, the EU institutions agreed on the new rules for so-called “country-by-country reporting”. With the approval of parliament, the law has now been finalized at EU level. Member States now have to implement it within 18 months.

According to the regulation, multinational companies with a worldwide turnover of more than 750 million euros must not only give the tax offices but also the public an insight into their books. This applies to both European and international companies based in the EU. In a country-specific report, they should publish, among other things, net sales, profit before tax and the income taxes actually paid. The number of employees and subsidiaries should also be made transparent. The data should be broken down for all EU countries, as well as for the countries on the EU list of tax havens.

This should give an insight into how tax saving models work. Some companies push their profits to countries with the lowest possible tax rates, even though they were not achieved there, in order to save taxes. This happens within the EU, but also worldwide.

MPs from various parties welcomed the new rule. “With this decision, the EU is taking on a global pioneering role and setting standards for more corporate transparency and tax justice,” said Joachim Schuster (SPD). Sven Giegold (Greens) called the measure a “sharp sword against tax dumping”. But he also called for tax information from large companies to be made transparent not only in the EU, but worldwide.

Researchers at the Leibniz Center for European Economic Research (ZEW) warned of a loss of value for companies due to the law. “Investors are very critical of public country-by-country reporting,” said Christoph Spengel from ZEW. Risks are, for example, competitive disadvantages or a bad reputation for companies./dub/DP/stk

Reference-www.finanzen.at

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