The deal reached yesterday between the European Parliament, Commission and Council on corporate tax transparency fails to cover most of the world, allowing plenty of leeway for corporate tax dodging.

The agreement on the file known as “country-by-country reporting” (CbCR), which member states had been stalling for years, requires multinationals and their subsidiaries with annual revenues of over €750 million to make public the amount of taxes they pay in each member state.

The final text has a very limited geographical scope and does not include major tax-havens.

The CBCR agreement also gives multinationals a five-year reporting exemption period, the so-called safeguard clause, to help them hide sensitive information –  a key demand of the lobbies representing big business.

A recent report by the Left group in the European Parliament found that Amazon pays little to no tax in Europe through its Luxembourg subsidiaries, which fictitiously report massive operating losses. Failing to include in the agreement full disaggregation on country-by-country reporting may make it hard to unearth such practices.

Every year, the EU loses up to €1 trillion to tax dodging. While the agreement will help reveal the extent of corporate tax avoidance in Europe, it opens the door for corporations to adjust and shift their tactics to other countries, according to the Left’s Co-President Manon Aubry:

“The agreement reached on public country-by-country reporting is very disappointing as it leaves out more than 80% of states in the world, including major tax havens such as the Bahamas, Switzerland and Cayman Islands. How can we pretend to fight corporate tax avoidance with such limited information?

“The European Parliament has given up on some of the key points under pressure from corporate lobbies and the Council. Whereas tax avoidance costs EU member states billions of euros every year, the European Union has demonstrated once again its inability to seriously tackle the issue. As always, the EU continues to defend the interests of global corporations over its citizens,” Aubry concluded.