Conservative MEPs have voted against 'country-by-country' reporting of companies' tax declarations, measures that will bring in greater tax transparency and assist the fight against aggressive tax avoidance.
The Shareholders Rights Directive, which Labour MEPs voted for, will also ensure better participation of shareholders in the governance of their companies, leading to a more sustainable and long-term focus, as well as increased accountability of directors to those who choose to invest.
In particular, 'say-on-pay', which requires that shareholders have a say on the remuneration of directors, will ensure improved democratic participation in remuneration packages.
Mary Honeyball MEP, Labour's European spokesperson on legal affairs, said:
"Just as George Osborne has delivered a budget for the rich in Westminster, so his Conservative colleagues in the European Parliament have voted against EU action to fight tax dodging.
"It is Labour MEPs who have voted for better corporate governance in the EU, for greater openness and for shareholders having the right to hold their directors to account over remuneration - while the Tories have stood up for companies that want to hide their profits."
Anneliese Dodds MEP, Labour's European spokesperson on taxation, added:
"Shareholders have a right to know where their companies make their profits, and where they pay their taxes. This helps shareholders to understand the health and the prospects of the company they are investing in, and gives them certainty the company is paying its fair share of tax.
"Last year's 'LuxLeaks' scandal showed just how little shareholders know about the tax arrangements of their companies under the current system, and how damaging that can be - and that is why the clear call today for public 'country-by-country' reporting for major international companies is so important.
"This isn't just good news for shareholders, it's good news for people right across Europe, as it will help all of us to hold these companies to account and make sure they pay their taxes where they make their profits."
Now that the Parliament has adopted its position on the Directive, it goes forward to Member States for further negotiation.