The new rules will stop companies from escaping tax by exploiting the differences between EU Member States and non-EU countries’ tax systems.

This directive completes the Anti Tax Avoidance Directive (ATAD) which ensures that the correct anti-abuse measures are applied throughout the Single Market.

Member states will have until 1 January 2020 to transpose the directive into national laws and regulations (1 January 2022 for one specific provision).

Since January 2017, Member States have had to automatically exchange information on financial accounts, as a step against offshore tax evasion. From July 2017, similar transparency rules will apply for tax rulings, while multinationals will have to provide country-by-country reports to tax authorities by the end of the year.

Over the next couple of weeks, the EU Commission will introduce a transparency initiative proposing for intermediaries to report cross-border tax planning schemes.

Both the EU Council and Parliament are currently negotiating over proposals to combat tax abuse such as public country-by-country reporting and stronger anti money laundering provisions.

Member States are also working on a EU list of non-cooperative jurisdictions, to tackle third countries that refuse to adhere to tax good governance standards. The list should be ready by the end of the year.

Pierre Moscovici, Commissioner for economic and financial affairs, taxation and customs said: ‘Our campaign for fairer taxation in Europe continues to reap results. Today's agreement is further proof of what the EU can achieve when we work together against common challenges. It is another victory for fair taxation and another blow against those companies that try to escape paying their fair share.’