(MENAFN- AFP) EU ministers agreed on Tuesday to a mandatory system for national authorities to automatically exchange information on secret tax deals made with multinationals, a decision made in the wake of the LuxLeaks scandal.
"We have a political deal," said Pierre Gramegna, finance minister for Luxembourg, which holds the rotating presidency of the European Union.
"Europe is showing the way, is a pioneer and is sending a strong signal to the world in tax matters," he said at a news briefing.
Under the new plan, the bloc's 28 countries would share deals agreed with some of the world's biggest multinationals in an effort to cut back on tax avoidance in Europe.
The LuxLeaks scandal last year revealed that some of the world's biggest companies -- including Pepsi and Ikea -- had lowered their tax rates to as little as one percent in secret pacts with tax authorities in Luxembourg.
The revelations, unearthed by a group of investigative journalists, were a huge embarrassment to European Commission head Jean-Claude Juncker, who served almost two decades as Luxembourg prime minister.
Juncker tasked the commission to push through the automatic exchange of tax rulings as part of the response to the scandal.
Luxembourg has always defended the legality of the secret tax rulings that allowed multinationals to know in advance how much they would be taxed.
The deal in Luxembourg comes after the world's advanced economies announced Monday a long-awaited plan to close the loopholes on tax-avoiding multinationals that cost countries more than $100 billion a year.
The OECD calculates that national governments lose $100 billion-240 billion (89 billion-210 billion euros), or 4-10 percent of global tax revenues, every year because of the tax-minimising schemes of multinationals.
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