The European Union's legislature is setting up an inquiry committee to look into the use of offshore accounts by people and multinationals to stash funds and avoid paying taxes, something which costs the EU billions of dollars a year.

European Parliament taxation expert Philippe Lamberts said Thursday that the recent leaks from a Panama law firm showed that despite some legislation in place "we have so far only been looking at the tip of the iceberg of the odious tax avoidance practices employed by wealthy individuals and businesses."

The legislature will agree on an exact mandate at its session next month. The MEPs who will sit on the committee will then be selected.

Energy Minister Konrad Mizzi may have to attend a hearing as part of the investigation.

Politicians, multinational companies and celebrities involved in the scandal will have to face MEPs following a decision by the leaders of the European Parliament to establish a special inquiry committee on the issue.

At the end of the exercise, the EP is expected to come out with recommendations – particularly on the tightening of EU laws against tax evasion.