Panama Papers: EU to force big firms to disclose tax details

The European Union is to unveil plans to force large companies to disclose more about their tax affairs, following the Panama Papers revelations.

Britain's EU Commissioner, Lord Hill, will today set out proposals to make multinational firms with more than £600m in annual sales detail how much tax they pay and where.

"There is an important connection between our continuing work on tax transparency and tax havens that we are building into the proposal," Lord Hill has said.

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According to the BBC, companies will now need to disclose information such as total new turnover, pre-tax profit, income tax due, amount of tax paid and accumulated earnings.

Country-by-country reporting rules already apply to banks as well as mining and forestry companies, but it is hoped the new plans will see this expanded to cover companies accounting for about 90 per cent of corporate revenues in the bloc, an EU spokesman told the corporation.

Meanwhile, Christine Lagarde, the managing director of the International Monetary Fund, has "poured cold water" on hopes that a global tax authority could be introduced, reports The Guardian. The idea of an intergovernmental UN tax body faces major obstacles from governments, she said.

"We need to be aware of the massive hurdles and obstacles along the way because taxation for the last century or so has been defined, conceptualised, designed, implemented on a purely territorial sovereign basis," said Lagarde.

"And if anything, levying taxation is considered as an attribute of sovereignty and anything that takes away from that is going to be very strongly opposed by many countries in the world, many forces."

However, she conceded that the current situation was not satisfactory and said it was an area "where we all have to think outside the box".