EU finance ministers have struck a deal on how to apply international rules to curb tax avoidance.
Malta, which holds the EU’s rotating presidency, said that the new rules, which will phase in by 2022, will tackle hybrid mismatches – a loophole that allows multinationals to exploit differences in national rules to hide money from the taxman.
The use of hybrid mismatches was one of the major tactics exposed in the 2014 LuxLeaks scandal. It has also been a focus of the subsequent state-aid probes carried out by the European Commission into tax planning by companies such as Starbucks and Apple.
The new rules implement international standards developed by the Organisation for Economic Cooperation and Development against “Base Erosion and Profit Shifting” by multinationals. EU finance ministers reached a deal on them at a meeting on Tuesday in Brussels.