Nick Shaxson ■ Take action to stop corporate tax cheating in Europe
Every year, corporate tax avoidance costs countries around the world an estimated US$ 500 billion or more. One reason for these losses is that companies are able to hide their financial affairs: from tax authorities, and from the public. More transparency will improve tax collection, and help pay for many public goods such as hospitals.
Since the 1970s, civil society groups have been pushing for a powerful transparency tool called Public Country by Country Reporting (CbCR) – which aims to get multinationals to report (and publish) details of their financial and tax affairs, broken down for every country where they do business. Until recently, these calls were opposed by powerful corporate lobbyists and fell on deaf ears: companies could scoop up their financial and tax results from several countries into one global or set of regional figures, which could not be unpicked to find out what is happening in each country.
Following sustained pressure from the tax justice movement, however, world leaders have started to give way. Little by little, governments and global institutions are mandating this form of corporate tax transparency – though still only up to a point.
For instance, European banks have had to publish their key financial data since 2015 — but this information is often difficult to find, complex, and presented in incompatible forms. A new report published a few hours ago by Transparency International, entitled Murky Havens and Phantom Profits: The Tax Affairs of EU and UK Banks, provides welcome clarity, showing both the improvements in transparency and the distance still to go. As others have noted: the data here is still not good enough.
Right now, a more focused, time-limited opportunity for reform has also opened up in the EU. A new report, also today, from Campact and Corporate Europe Observatory, notes that Germany’s Economy Minister Peter Altmaier is currently standing in the way of a proposal to mandate better transparency in Europe – and you can help break the deadlock. The report contains a petition, also supported by our German sister organisation, Netzwerk Steuergerechtigkeit:
Click here to find out who to send it to, and how. Please don’t delay. This window of opportunity will not be open for long.
If the EU can take the step to make the right kind of CbCR data public, then most of the remaining political objections to CbCR will be swept aside, including for lower-income countries. This is the moment, and we must seize it.
A year the tide turned in the fight for tax justice
Jersey’s Pandora’s Boxes: the Tax Justice Network podcast, December 2021
November 2021 Spanish language podcast, Justicia ImPositiva: Breve historia de los paraísos fiscales #65
Rethinking Limited Liability: Beneficial Ownership Transparency to Reform the Liability System, working paper
Tax Justice Network Portuguese podcast #30 Pandora Papers provam a podridão do sistema financeiro
Indonesia launches investigation following ‘Macao Money Machine’ report
October 2021 Spanish language podcast, Justicia ImPositiva: Los Pandora Papers, el Bitcoin en El Salvador y crisis de la inmobiliaria en China #64
Pandora Papers shows transparency failure is an accountability failure
Isle of Man banking data leak reveals how sharing data can identify offshore strategies and improve beneficial ownership
Isle of Man banking leak: Analysing banking data to reveal offshore strategies
29 September 2021