European Union finance ministers agreed on Tuesday to automatically exchange information on tax deals their governments strike with multinational companies, in a bid to clamp down on aggressive tax avoidance.
The deal follows years of controversy over methods used by big corporations to minimise their tax bills: EU competition authorities are already investigating arrangements used by Amazon and a unit of Fiat in Luxembourg, Apple in Ireland and Starbucks in the Netherlands, and may start new investigations.
The tax deals, known as rulings and advance price arrangements, enable companies to gauge the size of their future tax bills when they set up business in a new country. They are widespread and not illegal, but can allow large corporations to minimise the tax they pay in Europe by shifting profits to countries with lower rates.
Exchanging information on such deals is seen as a way of discouraging aggressive tax planning and making multinationals pay tax according to where they really do business.
“We have a political deal on this issue,” Luxembourg’s finance minister Pierre Gramegna said.
Full content: The New York Times
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