BRUSSELS, Belgium (AFP) – The European Union agreed a raft of anti-tax evasion measures Tuesday that would make it harder for multinationals to shift profits to countries with lower taxes, but critics said they were too watered down.
The proposals were agreed on provisionally by the EU’s 28 finance ministers on Friday, following major revelations in the Panama Papers and LuxLeaks scandals of tax schemes enjoyed by big banks, companies and wealthy individuals.
Final holdouts Belgium and the Czech Republic had asked for extra time to confer with their governments but have now backed the plan after winning concessions.
“Today’s agreement strikes a serious blow against those engaged in corporate tax avoidance,” Economics Affairs Commissioner Pierre Moscovici said in a statement.
Belgium was especially reluctant to adopt a limit on tax breaks for inter-company lending, fearing that corporations would seek better tax deals outside Europe.
Belgium is home to several of the world’s biggest multinationals, such as brewing giant AB InBev, and the Brussels government offers beneficial tax arrangements to many European units of global companies.
To win it’s backing, Belgium has been granted until 2024 to meet the new rule.
Greens MEP Eva Joly called the measures “a huge disappointment”, adding that the rule on inter-company lending was especially weak.
Ministers have “handled this central issue at an absolute minimum,” she said.
Also among the measures are tightened rules to expose shell companies that are used by big companies and wealthy individuals to hide revenue.
The proposals put Europe in line with new anti-tax avoidance rules established by the OECD and the G20 group of nations.