European Union countries will exchange information on the tax affairs of multinational companies after EU finance ministers backed new rules aimed at stopping big companies avoiding paying their fair share into government coffers.
The rules, which should take effect later this year, are a response to growing concerns about corporate tax avoidance, which costs the EU public 70 billion euros a year, according to a European Parliament estimate.
"Today we reached a political agreement on co-operation between tax administrations, country-by-country reporting. This is part of our work on the anti-tax avoidance package," said Dutch Finance Minister Jeroen Dijsselbloem, who chaired the meeting of EU ministers in Brussels on Tuesday (local time).
The new rules will oblige large companies to disclose data on revenues, profits and taxes to the administrations of all EU countries where they operate.
That data will then be exchanged between the 28 EU states.
The EU deal goes beyond international guidelines known as anti-BEPS (Base Erosion and Profit Shifting), agreed by the G20 and the Organisation for Economic Co-operation and Development.
Those guidelines do not force subsidiaries of foreign countries to disclose the tax data of their parent group, whereas the EU rules will affect foreign multinationals that have subsidiaries in the European Union, EU officials said.
Due to concerns expressed by Germany and some other EU states that the measures could scare away foreign investors , the new rules will only be mandatory for foreign companies from 2017.
The rules are expected to be formally adopted by June, Dijsselbloem said.