EU states to exchange sweetheart tax deal data

"Today's agreement means an end to obscure tax agreements between companies and authorities, which can facilitate tax abuse," EU finance commissioner Pierre Moscovici said after the meeting.

The directive will be retroactive to 1 January 2012. Arrangements made or renewed between 1 January 2012 and 31 December 2013 will have to be reported if they were still valid on 1 January 2014.

Arrangements issued between 1 January 2014 and 31 December 2016, event if no longer valid when the directive comes into force, will have to be reported.

"The Commission will be able to develop a secure central directory, where the information exchanged would be stored. The directory will be accessible to all member states and to the Commission," the Council of ministers explained in a statement.

Luxembourg's finance minister Pierre Gramegna, who chaired the meeting, said at a press conference that there was "a broad consensus".

Gramegna noted that the Council's agreement comes just a day after the Organisation for Economic Co-operation and Development (OECD) presented proposals on the issue to G20 countries.

"The EU is showing the way," Gramegna said. "Europe is sending a strong signal in terms of transparency in tax matters".

The directive on automatic exchange of information was proposed by the European Commission in March as a reaction to the so-called LuxLeaks scandal over sweetheart tax deals between Luxembourg and multinational companies.

The Council's decision, only seven months after the original proposal, "marks a leap forward in our efforts to advance on tax coordination and tax harmonisation," Commission president Jean-Claude Juncker said in a statement.

"The current system of corporate tax rules is unjust and unfit for purpose," added Juncker, who was prime minister during the period that Luxembourg issued tax rulings that are currently under investigation.

Details of the directive will have to finalised before the end of the year. Some aspects have not been decided, such as how companies will have to report country by country.

Moscovici said: "This is far from being concluded and the debate will continue" over whether to follow OECD rules for an exchange between administrations or to go further in transparency.

MEPs and NGOs have called for information to be made public on profits and losses before tax, taxes on profits or losses, and public money received.

"We have to combine strong demand for transparency and the need not to penalise European companies," Moscovici added, saying he personally favoured more transparency.