Brussels: The European Commission said Thursday that it is working on a proposal to require corporate giants with operations in the European Union to publicly report profits, taxes paid and subsidies received on a country-by-country basis.
Representatives of the 27 member-states agreed to seek ways to prevent multinationals from avoiding their obligations by channeling profits through subsidiaries in low-tax jurisdictions such as Ireland and Luxembourg.
The detailed reporting requirements that EU banks will face starting in 2015 should be extended to non-financial firms, Commissioner Michel Barnier said Thursday in Amsterdam.
"We will expand these reporting obligations to large companies and groups," he said.
Currently, fewer than 10 percent of the largest enterprises in the EU provide country-by-country financial data on a regular basis, Barnier said.
The issue came to the fore this week with the publication of a US Senate report showing that Apple Inc. paid a tax rate of just 2 percent in Ireland, whose official corporate rate is an already low 12.5 percent.
Ireland permits companies to incorporate in the Emerald Isle without becoming tax resident.
Dublin's EU partners have often complained about Ireland's low rate of corporate tax, which they see as giving the country an unfair advantage in attracting foreign investment.
Apple's two Irish subsidiaries have neither employees nor a physical presence in the country and the US investigation concluded that their sole purpose was to enable the California-based tech giant to avoid taxes in the US.
First Published: Friday, May 24, 2013, 13:01