Google, Facebook and Amazon could be forced to publish their revenue and taxes paid, under a new law drafted by the EU.
The proposed law, to be drawn up this year, would force every large company which operates within the EU to reveal its profits and taxes.
The European Commission is to table the legislation with the aim of making the world’s largest multinational corporations operate to full public scrutiny.
Officials from the EU told the Guardian that the idea would be to make taxation rules apply to the world’s biggest conglomerates – including those from the US.
Eurocrats ‘are currently finalising the impact assessment work’, a source told the newspaper.
‘It’s likely there will be some form of legislative initiative announced for the beginning of April … for public country-by-country reporting’.
Another EU source said: ‘It will likely target the large multinationals, all multinationals and not just EU ones.
‘The impact assessment had “really swayed opinion” inside the commission in favour of public reporting.’
Last month, the Government was accused of agreeing a ‘derisory’ £130m tax deal with Google, which has made £6bn in profit in the UK in the last ten years.
The company, and other large coporations like it, notoriously funnel their international sales via Dublin to benefit from Ireland’s lower tax rate.
David Davis, the vice chairman of the all-party parliamentary group on tax, said he believes that Google makes around £1.2billion a year in profit from UK sales and therefore should pay around £200million in tax.
But its tax set-up allows the business to send UK sales revenue through an Irish subsidiary and legally avoid corporation tax in Britain.
That cash is then funnelled via Holland, which offers a tax break too, and on to a holding company in Bermuda, which has a zero rate of corporation tax.
The new EU law would mean that the tax breaks received and revenue funnelled by Google in Ireland, Holland and even Bermuda could be forced to be declared.
The EU’s competition commissioner, Margrethe Vestager, has already found Starbucks in the Netherlands and Fiat in Luxembourg culpable of tax avoidance and ordered them to pay €30m (23m) each in unpaid taxes.
Last month, she also ordered 35 multinationals in Belgium to pay €700m in dodged taxes. Similar investigations are ongoing into Apple in Ireland and Amazon in Luxembourg.
The revenue threshold for companies ordered to report their earnings and taxes publicly has not yet been agreed.
But officials said the new rules will apply only to all ‘large’ global multinationals, meaning US companies such as Google, Amazon and Facebook will fall under its scope.
The new draft, to be presented in April, requires the agreement of all 28 governments.
However, EU sources said the new rules could come into effect passed by a majority vote, or 16 of the 28 countries.
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