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Eurodad steps up campaign for country-by-country reporting

printer Mail

Multinational ‘tax dodges’ are estimated to account for over half of all illicit capital flight from developing countries, the European Network on Debt and Development (Eurodad), a network of NGOs from 19 European countries, has claimed.

Marta Ruiz, Eurodad senior policy and advocacy officer, said a full global picture of a company’s economic activity was needed to address tax dodging, ‘the greatest source of illicit capital flight’.

In a new report, Exposing the lost billions, Eurodad – whose UK members include Oxfam and Christian Aid – discusses country-by-country reporting initiatives in the extractive industries and argues for reform across all sectors.

PwC Belgium said in a recent report for the European Commission that about two-thirds of business transactions worldwide take place within a group of companies, and many developing countries capture only 40% of their tax potential.

The development of a uniform set of transfer pricing rules would favourably affect the environment for international trade, contributing to investment and growth, PwC said.

Critics said that report was ‘strongly biased’ towards the private sector, but an EC spokesperson told Tax Journal that PwC had made ‘a valuable contribution’ to a fuller understanding of the problems associated with transfer pricing and developing countries.