EU looks to close tax loophole

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The European Commission has announced plans to close a corporate tax loophole in the EU.

The EU executive did not mention any companies by name.

It said the move was aimed at firms that channel profits abroad via specially-created subsidries to lighten their tax bill.

“The proposal is specifically dedicated to solve this problem and to prevent using of differences of tax laws in different member states for channeling profits without taxation from one member state to other member state or to third country,” said EU tax commissioner Algirdas Šemeta.

But the proposal needs the backing of all EU governments and MEPs before it can become law.

But some countries such as Luxembourg, oppose such tax crackdowns, arguing their light-touch regimes are key to attracting investment.

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