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Friday
Mar192010

MEPs Push For Companies To Disclose Offshore Profits

I’ve noticed recently another push for the disclosure of offshore assets for both individuals and companies. The latest push seems to be coming from Members of the European Parliament (MEPs) in an effort to have all multi-national sited organisations declaring their profits and taxes paid on country-by-country list.

The basis for their push is grounded in raising finances to assist developing countries suffering from the global economic downturn. Funding would also be raised to aid in meeting climate change objectives. Much of this, they say, can be achieved through removing the ability for companies to have tax havens.

Understandably there is a drive to share the wealth of the EU with those countries who are still developing. The question to be asked is to what degree MEPs (or MPs of any member country) are willing to go to promote growth in developing countries rather than investing in their own; and, whether it is just and fair to demand that multi-national companies should be footing the bill.

A stepping stone in this direction is their call for all multi-national sited companies (companies with offices/locations in more than one country) to have to declare their profits and taxes paid in each and every country that they conduct their business in. This is all apparently in a bid to ensure transparency.

If these proposals do make it as far as being made law, there would certainly be some interesting case law on the jurisdiction of taxation laws across Europe. Presently, companies are not under an obligation to declare their profits and taxes paid in other countries. I can see a very long drawn out battle over this one - probably not an issue to worry about for the meantime but certainly one to follow with interest over the coming years.

Managing offshore investments to the most profitable advantage of your business can be difficult at times. The laws of all countries involved need to be considered before jumping lightly into a decision. If your business is thinking about investing offshore or conducting other business activities offshore, contact one of our advisors for assistance in making the right decision.

 



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