European Union states should continue reforming corporate rules to tackle tax avoidance, EU tax commissioner Pierre Moscovici told finance ministers on Saturday, as some smaller nations urged slower reform to avoid scaring away big corporations. In a paper to be discussed at a meeting of EU finance ministers in Valletta on Saturday, Malta, which holds the rotating EU chair until July, said EU tax reforms would increase uncertainty, harming investment and trade.

It suggested states should be given more time to adapt to changing rules. Addressing the ministers, Moscovici opposed Malta's view and said the biggest source of uncertainty would be to maintain a "status quo" where EU states compete with each other on corporate tax policy. Many large US corporations have set up their headquarters in smaller EU states, allowing them to cut their tax bills due to more lax tax rules.

Following recent revelations, such as the Panama Papers, of widespread tax evasion and avoidance by big corporations and wealthy individuals, the European Commission has made several legislative proposals to close legal loopholes. However, some of the most ambitious plans have yet to be approved by EU states.

Multinationals, including Apple, Amazon.com , McDonald's and Starbucks Corp, are under investigation or have been sanctioned by the EU executive for their excessively low tax bills in some EU states.

Copyright Reuters, 2017