European Union (EU) government reached a deal with the EU Parliament on Tuesday over new rules that will force large multinational companies to disclose how much revenue and tax they pay in the 27-nation bloc and how much they pay in countries considered tax havens by the EU.
This has been an ongoing war since the last crisis when the likes of Amazon, Microsoft, Google, Facebook and others were exposed for paying ridiculously low amounts of tax.
Many critics have criticised it as a half-measure and corruption in the EU parliament for bowing down to the tech giants.
EU agrees to a tough new law at multinational corporations or token gesture?
The new law, proposed by the European Commission in 2016, is part of the EU’s efforts to fight tax avoidance by large international companies at a time when the EU badly needs cash to finance an economic recovery after the COVID-19 pandemic.
Under the new law, multinational corporations with a turnover of more than $916 million annually in two consecutive years will have to declare profits, tax and number of employees in EU countries and in countries on the EU list of non-cooperative jurisdictions.
This concession was agreed upon after some tough lobbying by the big corporations which became ‘quite tasty’ in the far eastern bloc as the big tech firms flexed their muscles.
This is an interesting move for the UK as the chancellor looks to place the UK as an alternative to the EU.
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