This follows strong sentiment from finance ministers from Luxembourg, Italy, France, Spain and Germany following a Special Committee on Tax Rulings that while tax competition cannot be avoided, the current tax system needs an overhaul as it has ‘reached its limits’.

In a key statement released at parliament, the minsters said that small firms should not have to bear the tax burden of multinationals that pay very little.

They said that action is needed to harmonise corporate tax practices across Europe, so as to make tax competition clearer and fairer.

Luxembourg finance minister and ECOFIN chair Pierre Gramegna underlined that fighting fraud and tax evasion is the presidency’s top priority.

‘Finance ministers agree that they cannot do without corporate tax revenues and multinational companies should pay a fair share,’ he said.

He further told other ministers that Luxembourg is committed to delivering an agreement among EU countries on the directive on automatic exchange of tax rulings, introducing a common corporate tax base, completing work on an agreement on the ‘interest and royalties directive’ by the end of this month and working towards an EU-wide minimum effective corporate taxation.

But MEPs are not in complete agreement with the stance and are now calling on the Council to address the parliament's wish for country-by-country reporting of corporate profits and taxes in countries where business is done, as stated in parliament’s position for negotiations on the Shareholder rights directive.

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