The legislation was recently amended in response to the Mossack Fonseca data leak, called the Panama Papers. One of the biggest leaks in history, the Panama Papers reveal how the rich and powerful, including world leaders, hide their wealth through offshore tax havens. The data reveals that 12 world leaders, 143 politicians, their families and close associates have been using offshore tax regimes.
The measure plans to make big companies show how much tax they pay and where, according to Reuters. Companies making over £600 million a year ($681 million) would be forced to reveal how much tax they paid in EU countries, while the rest of the world is viewed as a single item.
Officials said the draft of the new rule proposes that companies also list how much of their money outside the EU filters through any state that is determined by EU governments as a tax haven.
Commission president, Jean-Claude Juncker, is said to be in favor of the legislation, according to The Guardian.
However, some critics say the measure will be pointless, since states in the European Union have no agreement on what constitutes a tax haven.
“EU experience shows that member states will very probably delay or oppose the process of compiling a list of tax havens,” said Florian Oel of Oxfam, reported Reuters.
“It seems the Commission has not changed its proposal in substance,” Oel said. “And it still does not offer a solution for real tax transparency.”
Last week, the EU tax commissioner, Pierre Moscovici, urged countries to agree on a tax haven blacklist over the next six months.
Anti-corruption agencies have called for extending transparency obligations to all jurisdictions to avoid complication in agreeing what a tax haven is, however, the Commission has rejected the request.
Elena Gaita from Transparency International accused the Tax Commission of squandering “an opportunity to change the rules of the game after the Panama Papers.”
“This list of tax havens could be based purely on political convenience, excluding many countries. It will still allow the business of secrecy to continue as usual,” she added.