Over the last number of months, numerous multinational corporations have come under fire due to their less than transparent tax dealings and affairs. Recently plans had started to be put in place over measures aimed at forcing companies to reveal their tax payments in various jurisdictions. However, it has now been revealed that these plans have been put on hold.
Multinational companies such as Starbucks and Google have been operating questionable tax schemes whereby profits are filtered through overseas operations in low tax jurisdictions. Numerous countries, including the US, the UK and even the European Union had pledged to tackle the matter head on but have since made a U – turn on their promise.
The issue is now seemingly no longer at the forefront of people’s minds, with European lawmakers deciding last week to postpone plans to tighten transparency rules and regulations.
The new measures have been put off until 2016 and will be far more limited than the original plans suggested. Under the new laws, companies will have to allow full disclosure around policies to do with the environment, human rights and management diversity, but not tax measures. Even at this, companies can decide to withhold information on these topics if the information is deemed ‘sensitive’.
European Parliament member Arelene McCarthy commented thatGermanyandBritainwere primarily responsible for limiting the new law and accused the member states of protecting big industry. A British diplomat fired back that the Organisation for Economic Cooperation and Development are already putting new measures in place which address the areas not covered by the new law.
Many other members of the European Parliament expressed their disappointment at the limited scope of the new law and hope that the issue can be readdressed at a later date.