Under Mr Biden’s proposal, corporations would be prevented from shifting their profits across borders to avoid taxation, as a global fixed tax would be imposed.
But the plan, celebrated by the Belgian politician, could hurt Ireland’s economy, where most giant corporations are headquartered now in the EU.
Responding to Mr Verhofstadt’s tweet, one user said: “There is Ireland going under an EU bus. I thought you said you’d never do that.”
And another one: “Got to feel sorry for the Irish.
“They are now a net contributor to the EU budget now that the UK has left.
“And now it looks like the EU will take away the biggest part of their economy by imposing new EU Tax Laws… Good luck Ireland.”
Someone else warned Ireland would veto the decision.
They said: “What like 12.5 percent corporate tax rates in Ireland. No signs they will accept EU imposed rates!”
Others warned the proposal would see the end of the bloc altogether.
The new law, proposed by the European Commission in 2016, is part of the EU’s efforts to fight tax avoidance at a time when the EU badly needs cash to finance an economic recovery after the COVID-19 pandemic.
Under the new law, some large multinational corporations will have to declare profits, tax and number of employees in EU countries and in countries on the EU list of non-cooperative jurisdictions.
But data on tax paid in other countries outside the EU and not on the tax havens blacklist will only be given in aggregated form as EU governments did not want to agree to a more detailed country-by-country breakdown.
The Oxfam charity group criticised this, saying many of the world’s tax havens were not on the EU list of non-cooperative jurisdictions and therefore would avoid scrutiny.
The Oxfam charity group said: “Transparency for only the 27 EU member states and the 21 currently blacklisted or greylisted jurisdictions means keeping corporate secrecy for over three out of four of the world’s nearly 200 countries.”
Oxfam’s tax expert Chiara Putaturo added: “EU legislators have granted multinational corporations plenty of opportunities to continue dodging taxes in secrecy by shifting their profits to tax havens outside the EU, like Bermuda, the Cayman Islands, and Switzerland.”
She said the deal also offered companies a reporting exemption for commercially sensitive information for five years, providing a way to avoid disclosure and noted the large turnover requirement would exclude up to 90 percent of multinationals.
But some members of the European Parliament who negotiated the deal said it would still help make the tax system fairer.
Greens MEP Ernest Urtasun of the parliament’s economic and monetary affairs committee said: “These tax transparency measures will help to ensure that multinational companies pay their fair share and can bring some fairness to how they operate.”
According to the Tax Justice Network think tank, EU countries are responsible for 36 percent of tax lost globally to corporate tax abuse, costing countries worldwide over $154 billion every year as profits are shifted to low tax jurisdictions like Ireland, Luxembourg and the Netherlands.
The text of the agreement must now go through formal adoption in two European Parliament committees and the parliament’s plenary and in the Council of EU governments.