Tax rulings disclosure by 2017 signed off by EU chiefs

The European Council has come to an agreement on a directive that is aimed at improving tax disclosure requirements for member states.

The new arrangements announced by the EU’s governing body will cover the exchange of information regarding how companies’ taxes are calculated as well as rule on specific tax issues.

Corporate tax avoidance

The latest EU move is part of an on going process aimed at increasing global tax transparency, particularly in respect of the way multinational corporations operate within the complex web of national tax systems.

The new political agreement was reached at a meeting in Luxembourg of EU Economic and Financial Affairs ministers. Member states will be required to automatically share information on advance cross-border tax rulings and pricing arrangements.

Decisive step

Pierre Gramegna, minister of finance of Luxembourg and president of the Council, commented: "This is a decisive step towards greater transparency in tax matters."

"The presidency managed to obtain this agreement in record time. Europe is sending a strong signal for greater equity in taxation of businesses worldwide," he added.

Essentially, the new directive means that a member state affected by any of the changes announced by another member state will be able to monitor the situation as well as any impact that this may have on its own potential tax revenue.

The European Commission will also develop a secure central directory for storing the exchange of the data, which will be accessible to member states.