Luxembourg on Tuesday rejected media reports that it had started verbally offering companies beneficial tax arrangements, which raised concerns that the country may be trying to sidestep new EU tax transparency measures.
Several Belgian newspapers had reported that the verbal practice may be meant to avoid written agreements and thus bypass new EU measures to be implemented next year that will require member states to share information about tax arrangements they offer to companies.
"The information is wrong," a spokesman for Luxembourg Finance Minister Pierre Gramegna, Bob Kieffer, told dpa late Tuesday, underlining that his country had helped negotiate the new tax transparency rules.
Belgian Finance Minister Johan Van Overtveldt said earlier that he would seek a discussion with Gramegna on the sidelines of a eurozone finance ministers' meeting in Brussels to ask whether the media reports were accurate.
"If we all agree to be more transparent ... this [practice] seems difficult to defend," Van Overtveldt was quoted as saying by the Belga news agency.
Gramegna declined to take questions from journalists as he arrived for the ministers' meeting.
His spokesman said that Luxembourg has already been sharing information with Belgium about tax arrangements it has granted companies, even though the new rules have not yet come into effect.
The European Commission said Tuesday that it too was looking into the media reports. The European Union's executive fully expects Luxembourg to abide by the tax transparency rules, spokeswoman Vanessa Mock said.
The new rules 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 cost governments billions of euros every year in lost revenue.
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 including McDonald's.