Multinational companies have long been in the sights of European Union authorities because of the way they can legally reduce their bills by basing themselves in low-tax centres.

Ministers from Germany, France, Italy and Spain agreed that more coordination at EU level are needed to prevent corporations from shifting profits to countries where they pay lower taxes.

"We need collective rules to tackle harmful tax competition and aggressive tax planning," French finance minister Michel Sapin told European lawmakers in a joint hearing in the EU Parliament in Brussels.

His call was echoed by his counterparts from Germany, Italy and Spain. "Harmful tax competition increases profits in one state but compromises them in other states, preventing them from getting legitimate tax revenues,” Italy's finance minister Pier Carlo Padoan said.

These calls come as Europe's Economic Commissioner Pierre Moscovici is urging EU finance ministers to agree on sharing information about specific arrangements with corporations, known as tax rulings, at their next regular meeting on October 5.

Tax rulings provide companies with information about their future tax bills when they settle in a country.

"This in itself is neither illegal nor problematic but, if misused, tax rulings can facilitate or even encourage aggressive tax planning, resulting in a serious loss of revenue for member states," Moscovici said in his blog.

The EU is investigating the tax arrangements of Amazon and Fiat in Luxembourg, Apple in Ireland and Starbucks in the Netherlands and may start new investigations.

"Tax rulings should no longer be implemented to allow harmful tax planning," German finance minister Wolfgang Schaeuble told lawmakers in the joint conference organised by a special committee set up in the European Parliament to tackle harmful tax rulings.

As a disincentive against future aggressive tax deals, Moscovici wants states to set up a mechanism next year to automatically exchange data on deals struck with corporations. He is also pushing for the disclosure of arrangements made up to at least 5 years ago.

The Commission, the EU executive, also plans to launch a new proposal next year on a "common consolidated corporate tax base" (CCCTB) for multinational companies.

The plan will have a first phase where only a common tax base would be introduced. Consolidation, the most contentious issue, would be introduced later and entail the elimination of tax avoidance practices.

A previous attempt to bring in CCCTB drew opposition from member states who saw it as a first step towards harmonising tax rates, regarded as a sovereign issue.

(Reporting by Francesco Guarascio; Editing by Tom Heneghan)

By Francesco Guarascio