Draft legislation by the European Union’s executive is due to be tabled in April, sources told The Guardian.

It comes amid anger at the low rates of tax paid by many large companies.

Last month, Google agreed with the HM Revenue and Customs that it would pay £130m in tax for the last 10 years – a deal Chancellor George Osborne championed as a “major success”.

However Shadow Chancellor John McDonnell dismissed the amount as “mates rates”, adding “rumour has it that similar deals could be offered to Facebook and Amazon”.

The legislation proposed by the EU would remove the guesswork.

A source said that EU officials “are currently finalising the impact assessment work. It’s likely there will be some form of legislative initiative announced for the beginning of April … for public country-by-country reporting”.

Another insider said: “It will likely target the large multinationals, all multinationals and not just EU ones.”

The impact assessment “really swayed opinion” among officials, the source added.

John Christensen, of Tax Justice Network, welcomed the move.

“For a very long time big companies have been saying their tax affairs are a matter of competitive confidentiality,” he said. “We think it is incredibly important as a matter of principle that this information is made public.”

But Tove Maria Ryding, of the European Network on Debt and Development , told the Guardian that a key factor would be which firms were covered by the law.

She said if it was restricted to companies with a turnover of more than €750m, this would mean 85 per cent of the world’s multinationals would not be affected.

“That would obviously be a very big problem,” she said. “If you want to have a situation where small and medium-sized enterprises who don’t use these tax structures can compete, then we can’t leave 85 per cent of the multinationals with very obvious loopholes that mean that they can avoid taxation.”

More about: