Google, Facebook and Amazon may be forced to reveal tax haven activity
LONDON -- Tech companies such as Google, Facebook and Amazon are among the multinationals who will be forced to publicly disclose their activities in so-called tax havens, under new legislation being proposed by the European Commission.
The new rules were amended following a massive leak of documents from a Panama-based law firm.
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Companies earning more than £600 million a year will have to open up their books and show their profits and accounts in each European Union country, including how much money they make in the tax havens, Reuters reports.
The Panama Papers revealed that Mossack Fonseca, the world's fourth biggest provider of offshore services, acted for more than 300,000 companies, of which more than a half are registered in British-administered tax havens, as well as within the UK itself.
The investigation, carried out by the International Consortium of Investigative Journalism, has piled pressure on European governments to tackle tax avoidance. Tax legislation in the EU requires the agreement of all 28 governments.
However, critics say it could be useless as EU states have no common agreement on what constitutes a tax haven.
"EU experience shows that member states will very probably delay or oppose the process of compiling a list of tax havens," Florian Oel of Oxfam told Reuters.
"It seems the Commission has not changed its proposal in substance," Oel said. "And it still does not offer a solution for real tax transparency."
Campaigners have called for extending disclosure obligations to all jurisdictions, an approach that has been rejected by the Commission.
Elena Gaita, of Transparency International, accused the Commission of "squandering an opportunity to change the rules of the game after the Panama Papers".
But the plan may cause conflict with Washington, which has already complained that the EU is targeting successful American companies.
In January, it was revealed that Google funnelled billions of pounds of profits in tax havens like Bermuda, which is one of the 30 jurisdictions blacklisted by Brussels.
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