The European Union has acted to close a loophole, which allows multinational companies to reduce tax bills by exploiting differences in the tax laws of member states. <br /><br />In difficult economic times corporate tax avoidance is a source of public fury and campaigners have used the mood to get the EU to finally do something about it.<br /><br />The Greek Minister of Finance Gikas Hardouvelis and President of the Council made the following announcement: “This agreement allows for closing the hybrid loan mismatch; there are loopholes which generate important losses of revenues to our countries thus we are making a tangible step forward in the fight against tax avoidance.”<br /><br />EU tax law requires unanimity among member states. Europe has been torn between the demands of some countries, which see low tax as a way of attracting foreign business.<br /><br />While others fear tax changes will drive multinationals away resulting in unwanted job losses. <br /><br />Earlier this month, the European Commission increased pressure on Ireland, the Netherlands and Luxembourg over their corporate tax practices, saying it would investigate deals cut with Apple, Starbucks and Fiat.
