The Commission will propose new legislation in April that makes profit and tax information open to the public, according to "three senior EU officials familiar with the proposals", The Guardian said.
This is likely to cause anxiety among multinationals if the data ispublished without any context, said tax expert Catherine Robins of Pinsent Masons, the law firm behind Out-Law.com.
Last month the Commission proposed a package of measures designed to implement some of the recommendations made by the Organisation for Economic Co-operation and Development (OECD) as part of its project to counteract base erosion and profit shifting (BEPS).
BEPS involves tax planning by multinational businesses to exploit gaps and mismatches in international tax rules by artificially shifting profits to low or no-tax locations, resulting in little or no overall corporate tax being paid.
One of the OECD 'minimum standards' that OECD and G20 countries have agreed to implement relates to country-by-country reporting. This would apply to multinationals with annual consolidated group revenue in the preceding fiscal year of € 750 million or more. Such groups would be required to file country-by-country reports with a breakdown of financial information for all countries in which they make profits and pay taxes around the world.
Under the OECD proposal the tax administration in the country where a multinational group is resident would collect information about its activities, and its global income and taxes paid. That information would then be automatically exchanged annually with the tax authorities in all countries where the multinational operates. The first exchanges are expected to start in 2017-2018.
The package announced by the European Commission last month included changes to the Directive on Administrative Cooperation in Taxation to provide for country-by-country information to be exchanged by member states. At that time the Commission said that it was considering how the information could be made public, but gave no further information on this aspect.
Tax campaigners have called for the information to be made publicly available and last month UK chancellor of the exchequer George Osborne said that he would like to see country-by- country data made publicly available.
The Commission's proposals will only come into force if approved by EU member states.
Robins said: "It looks to be only a matter of time before groups are forced, either by this EU measure or by domestic rules, to make country-by-country data public."
"Multinationals will be concerned that making the information public will increase the cost for them as they will have to explain the figures. They will be anxious that simply publishing highly complex data with no contextual explanation could lead to misunderstandings – as we have seen previously when companies have been attacked in the press for not paying much tax because they have claimed capital allowances on major capital projects or have incurred huge amounts of R&D expenditure," she said.