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The countries of the European Union adopted on Wednesday, new rules for the tax administrations of European countries to exchange tax information with each other multinational companies with a turnover exceeding 750 million euros. The new European directive, formalized at the meeting of finance ministers of the 28 European countries in Brussels, follows the Organization recommendation for Economic Cooperation and Development (OECD), which is required to multinational which states, country by country, a set tax information, leaving it to the national tax authorities automatically exchange these data with each other.

Companies are required to report information on the turnover, profits, taxes paid, capital, earnings, tangible assets and number of employees. The Directive provides that undertakings are required to communicate, as compared to fiscal year 2016, declarations to the tax administration where they have tax residence. After the fiscal year, companies have one year to send the declaration to the tax authority of the country, which have then three months to ensure the automatic exchange with other countries through the common communication network at European level. The intention of the new directive is to increase transparency on the activity of multinationals to pay taxes in the country where you actually get profits and feel compelled to adopt aggressive tax planning practices.

The governments of the European Union had already reached an agreement in March on the new directive, which has to follow another one, already in place, which provides the automatic exchange of information between European tax authorities. The initiative which is the basis of the new rules is the BEPS Action Plan, OECD, a set of recommendations to “combat erosion of the tax base and the transfer of profits.” The idea is that, from common standards, you can make a uniform assessment of the indicators of companies. In parallel with the new European rules, 30 countries, including Portugal, have agreed on the OECD to share information on multinationals. Discussions in the OECD and the G20 last for more than two years and gained greater expression after LuxLeaks scandal when in 2014 the International Consortium of Investigative Journalists (ICIJ) revealed that more than 340 multinational benefited from secret agreements with Luxembourg, to pay less tax than in countries of origin.

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He was born in California, US. He graduated from California University with a degree in Computer Sciences, and now works for Reuters and running this Weekly Newspaper. Alongside his day jobs in Reuters, McDonald is also broadcasting a Weekly Gazette.