Luxembourg faced new questions over its corporate tax practices on Tuesday after Belgian media reported that it had started verbally offering companies beneficial tax arrangements.
There are concerns that this is meant to avoid written agreements and thus bypass new measures that the European Union will implement to crack down on tax-dodging by multinationals. They foresee EU nations sharing information about tax arrangements they offer to companies.
Belgian Finance Minister Johan Van Overtveldt said he would seek a discussion with his Luxembourg counterpart Pierre Gramegna on the sidelines of a eurozone finance ministers' meeting in Brussels on Tuesday to ask whether the media reports were accurate.
"If we all agree to be more transparent, ... this [practice] seems difficult to defend," he was quoted as saying by the Belga news agency.
Gramegna declined to take questions from journalists as he arrived for the ministers' meeting.
The European Commission said earlier it was also looking into the media reports. The European Union's executive fully expects Luxembourg to abide by the bloc's new tax transparency rules, which it helped negotiate, spokeswoman Vanessa Mock said.
The new rules, which will come into effect next year, foresee EU countries producing reports every six months on any cross-border tax rulings they have issued and share them confidentially with other member states.
Tax rulings spell out the method by which taxes are calculated for specific taxpayers and are used by countries to provide companies with tax clarity. They often involve beneficial tax schemes.
"I think one should preferably not have any rulings and if so, then in writing," Austrian Finance Minister Hans Joerg Schelling said in Brussels.
Corporate tax avoidance in Europe is believed to involve billions of euros every year in lost revenue for public budgets.
It is not the first time that Luxembourg comes under pressure from the EU over corporate tax matters. The commission has investigated the small European country, long accused of being a tax haven, for granting illegal advantages to multinationals such as McDonald's.