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Marco Buschmann: The Federal Office of Justice should enforce the new rules
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Emmanuele Contini / IMAGO
FDP politician Marco Buschmann has introduced a law according to which large and internationally active corporations will have to make their tax payments more public in the future.
The cabinet has now approved a corresponding draft from the Federal Ministry of Justice, which it directs.
Buschmann spoke of a contribution to more tax transparency.
"For a public debate on whether multinational high-revenue companies and corporations also pay taxes where they operate, we need country-specific income tax information," he said, according to a statement.
"Therefore, such companies and corporations should no longer only report their tax payments to the tax authorities, but also make them accessible to the public broken down by specific countries."
Administrative and fines possible
However, the current legislative initiative does not only go back to the liberal politicians.
The new regulation is intended to implement an EU directive.
According to the draft, companies from the EU or with larger activities in the Union are affected in Germany.
You must have a worldwide turnover of at least 750 million euros.
Comparably large companies from abroad that have medium-sized subsidiaries or branches in Germany are also to be covered by the new law.
In the future, they will all have to report on their income taxes and publish the information in the company register.
Mandatory information for affected groups includes the number of employees, sales, pre-tax earnings, income taxes paid and retained profits.
The Federal Office of Justice (BfJ) is responsible for enforcing the disclosure requirements.
According to the Ministry of Justice, this can impose fines in the event of default and fines in the event of content violations.
So far, numerous large companies have used subsidiaries, for example, to shift profits to low-tax countries with the lowest possible tax rates, such as Ireland, Luxembourg and the Netherlands, and thus reduce payments to the tax authorities.
According to estimates, the EU countries lose tens of billions of euros every year through tax avoidance by large companies.
The tax information should be broken down according to EU member states and certain other tax jurisdictions.
The draft law is now being discussed in the Bundestag.
The EU directive must be transposed into German law by June 22, 2023.
Apr/Reuters
