Panama Papers: EU unveils new disclosure rules for multinationals

The European Commission on Tuesday unveiled new proposals that would force large companies such as Google, Apple and Starbucks to disclose their profits and taxes in all EU member states where they operate.

Under the plans being put forward by finance commissioner Jonathan Hill (pictured), all multinational companies with a turnover of more than €750m (£598m) would have to comply with stricter disclosure rules such as pre-tax profits, tax due, yearly profits and the amount of tax paid on a country-by-country basis.

In addition, companies would have to publish an aggregate figure for total taxes paid outside the EU.

The rules were also extended to cover overseas tax havens in light of the revelations from the Panama Papers documents leak.

"The Panama papers have not changed our agenda, but they have strengthened our determination that taxes are paid where profits are generated," Hill told a news conference.

The commission said the plans would build on the Commission's work to tackle corporate tax avoidance in Europe, estimated to cost EU countries €50bn-€70bn a year in lost tax revenues, and supplements other measures such as the introduction sharing of information between tax authorities.

The commission said the proposal was a proportionate way to increase large multinationals' accountability on tax matters without damaging their competitiveness.

"Our economies and societies depend on a tax system that's fair, a principle that applies both to individuals and to business. Yet today, by using complicated tax arrangements, some multinationals can pay nearly a third less tax than companies that only operate in one country," Hill said.

"I would prefer businesses to be concentrating on their customers, on service, on product innovation, on true competition rather than on competition of the creativity of their tax advisers."

"Our proposal to increase transparency will help make companies more accountable. It will promote fairer competition between companies regardless of their size".

“While our proposal on country-by-country reporting is not of course focused principally on the response to the Panama Papers, there is an important connection between our continuing work on tax transparency and tax havens that we are building into the proposal,” he said.