In an era where multinational enterprises (MNEs) dominate the global economy, understanding their tax practices has never been more crucial. Taxplorer.eu is a new platform designed to provide insights into how large corporations approach taxes across borders. This tool collects, aggregates, and analyzes data from country-by-country reports published by multinationals, offering a comprehensive view of their financial operations.

The platform - a joint project of the EU Tax Observatory and Data for Good – offers detailed country-by-country financial reports, allowing users to see where corporations declare profits and revenues, identify potential uses of tax havens or loopholes, and analyze tax payments versus actual operations. While some multinationals have started publishing detailed country data, these reports are typically scattered and challenging to analyze collectively. Taxplorer compiles this information into an accessible format, making it much easier to scrutinize the tax footprints of major multinationals.

The Motivation Behind Taxplorer

MNEs have become dominant players in the global economy, often employing tax avoidance strategies that shift profits to low-tax jurisdictions. In 2021, the revenues of the 100 largest MNEs matched the combined GDP of Germany, France, Italy, and Spain. This immense economic power has enabled them to shift an estimated $1 trillion in profits to tax havens in 2022, representing 35% of all foreign profits. This widespread tax avoidance erodes corporate tax revenues, costing governments nearly 10% of their potential collections. The European Union and developing countries, which rely heavily on corporate tax for public spending, are particularly affected.

Despite efforts like the OECD's Base Erosion and Profit Shifting (BEPS) initiative and U.S. legislative measures, profit shifting persists. U.S. multinationals, which account for about 40% of global profit shifting, continue to move nearly half of their foreign profits to low-tax areas, while their non-U.S. counterparts shift around 30%.

Though the voluntary publication of country-by-country reports (CbCRs) by MNEs has increased, only 153 out of thousands of large MNEs have shared this data as of 2021, making up less than 2% of all large MNEs worldwide. Taxplorer aims to address this lack of transparency.