THE EU has dealt a blow to businesses contributing to cross-border tax avoidance.

MEPs overwhelmingly voted to back a new proposal which states that companies must now report their plans for any avoidance scheme to a central EU directory.

The information collected by the directory will then be made available to national tax authorities in EU member states.

MEPs also demanded more transparency over the EU blacklist of tax havens, requesting clearer criteria for when a country should be added to the list.

“The European Parliament remains steadfast in its commitment to greater transparency and strong measure to tackle tax avoidance and evasion,” a spokesman said.

“When it comes to aggressive tax planning, public authorities must clean up the mess; they cannot limit themselves to the flow of new schemes, they have to tackle the stock.”