The European Union (EU) has unveiled new plans that will require large companies to reveal their tax affairs as part of an effort to reduce corporate tax avoidance.
The rules, presented by the European Commission, will affect multinationals that generate £600 million or more in sales, and come after the criticism of the use of tax havens following the Panama Papers revelations.
Companies will have to reveal the amounts of tax that they pay on a country-by-country basis, along with any activities undertaken in tax havens.
Mining and forestry companies, as well as banks, are already required to abide by country-by-country tax reporting rules.
The introduction of such rules for multinational companies will mean that 90% of corporate firms operating within the EU will be affected.
Business groups have expressed concerns that the rules will require them to reveal their profits to both the tax authorities and the general public.
Additionally, the rules have been met with considerable opposition from businesses based within America, who have claimed that the EU is targeting profitable US companies.
The EU’s financial services commissioner, Lord Hill, said: ‘Our economies and societies depend on a tax system that’s fair, a principle that applies both to individuals and to business’.