Updated 12.10pm

European Union finance ministers moved closer to devising common rules to counter multinationals' tax avoidance and drawing up a common list of tax havens at a regular meeting in Brussels today.

The agreement goes some way towards overcoming different positions on how to tax the dividends of multinational corporations and on how to define a tax haven, part of an EU push to recoup revenues from wealthy individuals and companies that unfairly reduce their tax bills by shifting profits to countries with low or no taxation.

Finance Minister Edward Scicluna told an ECOFIN meeting that the agreement meant Europe would have "a complete system of anti-tax avoidance that will also cover hybrid mismatches with third countries."

The intention is to stop multinationals from exploiting different rules on taxes and tax deductions in the countries where they operate, which have allowed them to drastically reduce their tax bills.

So-called 'hybrid mismatches' now cannot be used to avoid tax in the EU, even when arrangements involve third countries. New rules will come into force on January 1, 2020 with a longer phasing-in period of 2022 for one article. 

In a statement, the Finance Ministry said that the agreement was "testament to Malta's unwavering commitment in fighting tax avoidance" and proof that the international media's allegations that the government intended to drag its feet on the issue were unfounded. 

“Our aim is to promote worldwide good standards that are already applicable in the EU, and jurisdictions will be subject to a rigorous screening. This way we can ensure that non-EU countries match our minimum standards,” Prof. Scicluna said. 

Last December, EU ministers failed to reach a deal on the issue, after a proposal put on the table by the then Slovak presidency and backed by Britain, was seen as a watering down of the plan by other ministers.

In a statement, European Commissioner Pierre Moscovici said the new rules were "another success story in our campaign for fairer taxation."

"Step by step, we are eliminating the channels used by certain companies to escape taxation," he added.