The European Commission has thrown down a challenge to the European Union’s member states, announcing an ambitious legislative proposal to bring to light tax deals that they strike with multinational companies.

Additionally, the Commission is looking to breathe new life into corporate-tax reforms that are resisted by some member states and some elements of the European Parliament.

The first weeks of Jean-Claude Juncker’s presidency of the European Commission were marred by revelations about sweetheart tax deals that Luxembourg, under his premiership between 1995 and 2013, had made with a number of multinationals.

Juncker emerged yesterday (18 March) from a meeting of the college of European commissioners arguing for reforms that would make such tax deals known to other member states.

“Tolerance has reached rock-bottom for companies that avoid paying their fair share of taxes and for the regimes that enable them to do this,” Pierre Moscovici, the European commissioner for economic and financial affairs, taxation and customs, said in Brussels yesterday.

Reporting on the outcome of the Commission meeting, Moscovici said: “President Juncker stressed that we should go further on that matter.”

The Commission is proposing that member states should have one year to exchange details about all tax agreements struck in the last ten years that remain in force. They should circulate information on a quarterly basis to other member states and to the Commission about new tax deals struck with multinationals. The information would remain confidential, but member states would be able to request more detail about specific agreements.

The planned legislative reforms make good on Juncker’s commitment in mid-November – after only the second meeting of the college – to get tough on tax avoidance. He had been reacting to revelations that Luxembourg had cut deals with multinationals that guaranteed tax rates as low as 1%.

In the wake of those revelations, Juncker said the deals resulted from the “logic of the non-harmonisation” of tax rules within the EU. He admitted that the revelations had damaged his standing, telling Libération that they suggested he had “participated in schemes which infringe elementary rules of ethics and morality”.

Complaints about tax competition last year triggered a Commission investigation into tax deals between Ireland and the computer giant Apple, between the Netherlands and the coffee chain Starbucks, and between Luxembourg and both online retailer Amazon and a subsidiary of Fiat, the Italian carmaker. The Commission suspected that the low tax rates granted to those multinationals could amount to illegal state aid under EU law.

The proposals that the Commission published yesterday would need the unanimous support of the member states and the majority backing of the European Parliament to become law. Moscovici suggested that the legislation could be adopted by the end of the year, allowing tax authorities to start exchanging information by January 2016.

An EU official said that Latvia, which holds the presidency of the EU’s Council of Ministers, was “very committed” to moving ahead with negotiations. The official also said that Luxembourg, which takes over the Council presidency in July, had given a “very clear commitment” to enact the legislation.

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Moscovici insisted that the Commission was not questioning the utility of tax rulings but described the current system as opaque. “Member states need to open up and work together,” he said. Moscovici suggested that the greater transparency would exert a positive influence on both government and companies striking tax deals. But another EU official said that member states could use domestic law to prevent companies from enjoying the benefit of the tax deals that they judge illegal.

While MEPs were almost unanimous in welcoming the Commission’s proposal, both the centre-right European People’s Party (EPP) and the centre-left Socialist and Democrats (S&D) described the initiative as only a “first step”. Like the Commission, the two groups want companies to be taxed where they make their profits, although there is little agreement so far on how to bring that about.

Moscovici said yesterday that in principle he was broadly in favour of imposing a requirement on companies to report their profits on a country-by-country basis, but was still assessing the practicalities.

Burkhard Balz, a German centre-right MEP and spokesman for the EPP, warned Moscovici against such country-by-country reporting obligations, describing them as an “avalanche of new bureaucracy”.

Moscovici promised to relaunch in June a Commisison proposal to create an optical single European corporate tax base, which has been stuck in negotiations between member states since 2011.

Morten Messerschmidt, a Danish MEP, said that the European Conservatives and Reformists group, the third largest in the European Parliament, would “stand firm” against such “fantasies of EU tax harmonisation”. Taxation, he said, was “a competence that must remain with the member states”.