EU's 27 leaders agree to important step in fight against tax evasion by year's end

BRUSSELS — The European Union's leaders have agreed to push through a major policy to tackle tax evasion by the end of the year.

The EU said the 27 heads of state and governments agreed at summit in Brussels Wednesday to an automatic exchange of bank information among the bloc's tax authorities to catch tax cheats.

European Council President Herman Van Rompuy smiles as he faces the cameras upon arrival at an EU summit in Brussels on Wednesday, May 22, 2013. Leaders from the 27 European Union countries gather in Brussels for one of their regular European Council sessions. On the agenda is the increasingly controversial subject of large corporations’ creative tax avoidance schemes. (AP Photo/Ezequiel Scagnetti)

German Chancellor Angela Merkel says the agreement — long resisted by Austria and Luxembourg — marks a "breakthrough" in Europe's fight against tax evasion.

The EU says the policy will be finalized by the end of the year in parallel to negotiations on the same matter with countries such as Switzerland and Lichtenstein which are not EU members.

European officials say tax fraud costs the bloc an estimated 1 trillion euros ($1.3 trillion) a year.

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