Large multinational firms should publish detailed information on any profits and taxes registered in tax havens, under a proposal unveiled by the European Union's executive on Tuesday that drew immediate criticism from several campaign groups.
The plans come a week after a massive data leak on the use of tax havens, dubbed the Panama Papers, which called into question the finances of numerous politicians, sports stars and celebrities. Multinationals have previously also been the focus of tax-dodging allegations.
The European Commission proposal is part of a wider crackdown on corporate tax avoidance and evasion that predated the Panama Papers scandal. The practice is estimated to deprive EU member states of up to 70 billion euros (80 billion dollars) in revenues annually.
"The Panama Papers have not changed our agenda, but I think that they have strengthened our determination to make sure that taxes are paid where profits are generated," said EU Financial Services Commissioner Jonathan Hill.
"By using complicated tax arrangements, some multinationals can pay nearly a third less tax than companies that only operate in one country," he added.
Under the proposal, any multinational with annual global revenues of more than 750 million euros operating in the EU would have to publish country-by-country data on their website detailing where they make their profits and where they pay their taxes in the bloc.
This information would also have to be made publicly available for any tax havens - countries that do not abide by international taxation standards - in which these firms have a presence.
The measures - which would cover about 6,500 businesses, according to Hill - require member state approval and the backing of the European Parliament to take effect.
Employer association BusinessEurope criticized the plan, arguing that it would put companies operating in the EU at a competitive disadvantage.
"These proposals, by making the EU a lone front runner in terms of public disclosure, risk undermining our attractiveness as a location for investment, particularly from overseas," said Markus Beyrer of BusinessEurope.
The commission argues that it has taken this into account.
Companies established in the EU currently have to share detailed information with national tax authorities, but are not required to make it public.
Transparency International criticized the proposal as a "squandered" opportunity to make companies more accountable, arguing that only a fraction of finances will be open to scrutiny.
"The last-minute addition of tax havens smacks of window dressing," said Elena Gaita of Transparency International. "Companies will still be able to strike favourable deals with governments in other parts of the world without public scrutiny."
Oxfam called instead for an obligation for big companies to disclose basic information for all countries they operate in, arguing that tax haven criteria are "absolutely vague."