Corporate tax avoidance has become a hot issue
in industrialized nations. Campaigners have drawn support from
public anger at companies avoiding taxes at a time of austerity.
"The aim is to close a loophole that currently allows corporate
groups to exploit mismatches between national tax rules so as to
avoid paying taxes on some types of profits distributed within
the group," finance ministers said in a statement.
The change in the so-called parent-subsidiary directive
addresses "hybrid loan arrangements", a combination of equity
and debt often used as a tax-planning tool.
Some member states classify profits from such tools as a
tax-deductible debt; others do not. That has prompted some
multinational companies to open subsidiaries in other member
states so they pay little or no tax.
All EU tax law requires unanimity among member states, and
getting all states on board has been an uphill struggle. Europe
has been torn between the demands of small countries fiercely
resisting change to low-tax regimes that attract foreign
investment, and others wary of driving away big employers.
Earlier this month, the European Commission increased pressure
on Ireland, the Netherlands and Luxembourg over their corporate
tax practices, saying it would investigate deals they cut with
Apple, Starbucks and Fiat.
Member states will have until the end of 2015 to turn the change
into national law.
(Reporting by Annika Breidthardt; Editing by Larry King)
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