New UK legislation could force multinational corporations to reveal the taxes they have paid in every country in which they operate, after MPs voted in favour of landmark new tax proposals this evening.
The new rules would introduce a country-by-country reporting system, allowing tax information published by HM Revenue and Customs (HMRC) to include details on where a company's revenues are earned.
Much of this information is already provided to tax authorities privately, but the new rules could force HMRC to reveal the information publicly, allowing closer scrutiny of big company's tax affairs.
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The plans, spearheaded by Public Accounts Committee member and Labour MP Caroline Flint, will work their way through parliament as an amendment to last year's Finance Bill - the Budget - after winning the support of government ministers.
Speaking earlier in the day, Conservative Treasury minister Jane Ellison said the government "fully supports" the move towards country-by-country reporting, adding it believed in “greater tax transparency and greater public disclosure of the tax affairs of large businesses”.
Despite shadow chancellor John McDonnell committing to give Flint's proposals the Labour Party's complete backing, Labour MPs actually voted against the entire package of measures, which includes plans to reduce corporation tax and introduce a sugar levy, in the Commons this evening.
Fantastic news Govt accepts my Am 145 to enable the introduction of public country-by-country reporting. Thanks everyone. #showmethemoney— Caroline Flint (@CarolineFlintMP) September 5, 2016
Having passed the Commons, the bill will now be scrutinised in the House of Lords, meaning the measures could yet be unpicked.
The move also comes just a week after the EU ruled that Apple must pay a €13bn tax bill to Ireland after it was deemed to have benefited from a sweetheart tax deal which allowed it to shift profits around the world and minimise its tax liabilities.