EU to close tax loopholes for multinational companies

Finance ministers from European Union member states have agreed on new measures to close tax loopholes that allow multinational companies operating in both EU and non-EU countries to avoid paying taxes.

Malta’s finance minister, Edward Sciclunda, said on Tuesday that the agreement, reached at a meeting of the bloc’s 28 finance ministers, aims to prevent large companies from exploiting differences in tax codes relating to multinational companies in and outside the EU, known as “hybrid mismatches,” to avoid paying taxes altogether.

“It’s like double non-taxation,” Mr. Sciclunda said.

According to him, the directive is the latest of a number of measures designed to prevent tax avoidance by large companies, preventing them from exploiting disparities between two or more tax jurisdictions to reduce their overall liability.

Report said that the new rules would take effect in January 2020.

The measures build on an anti-tax avoidance package agreed by EU countries last summer to create a more effective and transparent corporate taxation system in the bloc.

Currently, corporate tax fraud deprives EU public funds of 50 to 70 billion Euros per year.

(dpa/NAN)