EU Agrees New Rules to Fight Corporate Tax Dodgers

The European Union agreed Tuesday on a set of rules and standards aimed at closing loopholes that allow wealthy multinationals to shift profits and avoid footing large tax bills. The agreement marks a breakthrough for the 28-country bloc, which has been reeling from disclosures that multinational companies struck alleged sweetheart deals in countries such as Luxembourg that allowed them to pay very little tax in the EU. “Today’s agreement strikes a serious blow against those engaged in corporate tax avoidance,” said Pierre Moscovici, the bloc’s tax affairs commissioner. “For too long, some companies have been able to take advantage of the mismatches between different Member States’ tax systems to avoid billions of euros in tax,” he added. The European Parliamentary Research Service estimates that corporate tax avoidance results in a loss of tax revenue to the EU of about EUR50 billion ($56.56 billion) to EUR70 billion each year.