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Osborne supports publication of country-by-country tax information

UK chancellor George Osborne supports the idea of multinationals' tax information being made public, the Financial Times has reported.16 Feb 2016

New measures reportedly being proposed by the European Commission would see multinational companies operating in Europe having to publicly disclose their earnings and the tax paid in each European country.

Osborne told a meeting of EU finance minister that this is something that the UK would promote, the Financial Times said.

"I like low taxes but I do think those taxes should be paid. There’s a justified public concern in all our countries, certainly in the UK, that multinationals are using outdated international tax laws to avoid paying a fair share of taxes in all jurisdictions," Osborne said, according to the newspaper.

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.

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 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.