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Clamping down on tax evasion and avoidance: Commission
presents the way forward
"Around one trillion euros is lost to tax evasion and
avoidance every year in the EU.
Not only is this is a scandalous loss of much-needed revenue,
it is also a threat to fair taxation.
While Member States must toughen national measures against tax
evasion, unilateral solutions alone won't work.
In a Single Market, within a globalised economy, national
mismatches and loopholes become the play-things of those that seek to escape
A strong and cohesive EU stance against tax evaders, and those
that facilitate them, is therefore essential." said Algirdas Šemeta,
Commissioner for Taxation.
With this in mind, the Commission today presented an Action
Plan for a more effective EU response to tax evasion and avoidance.
It sets out a comprehensive set of measures, for now and for
the future, to help Member States protect their tax bases and recapture billions
of euros legitimately due.
As an instant first delivery, the Commission also adopted two
Recommendations today, to encourage Member States to take immediate and
coordinated action on specific pressing problems.
The first Recommendation foresees a strong EU stance against
tax havens, going beyond the current international measures.
Using common criteria, Member States are encouraged to
identify tax havens and place them on national blacklists.
Specified measures to persuade these non-EU countries to apply
EU governance standards are also set out.
The second Recommendation is on Aggressive Tax Planning.
It suggests ways to address legal technicalities and loopholes
which some companies exploit to avoid paying their fair share.
Member States are encouraged to reinforce their Double Tax
Conventions, to prevent them from resulting in no taxation at all.
They should also adopt a common General Anti-Abuse Rule, under
which they could ignore any artificial arrangement carried out for tax avoidance
purposes and tax instead on the basis of actual economic substance.
Other initiatives foreseen in today's Action Plan include a
Taxpayers' Code, an EU Tax Identification Number, a review of the anti-abuse
provisions in key EU Directives, and common guidelines to trace money flows.
In order to further improve the work within the EU on harmful
tax competition, Member States are urged to reinvigorate the work of the EU Code
of Conduct on business taxation.
If solutions to remove particular mismatches are not agreed
and implemented in a timely and effective way, the Commission will, where
appropriate, come forward with legislative proposals for action.
It is also recommended that the Code of Conduct is extended in
scope to include special tax regimes for wealthy individuals.
Today's Action Plan will serve as a robust EU contribution to
the international debate on evasion and avoidance, particularly within the OECD
As such, it will support the EU's position in pushing for
higher standards of tax good governance globally.
In order to ensure that today's Action Plan is driven forward,
the Commission will set up active new monitoring tools and scoreboards, to
maintain momentum in the fight against tax evasion and avoidance.
A new Platform for Tax Good Governance will monitor and report
on Member States' application of the Recommendations.
The Action Plan and Recommendations will now be presented to
the EU's Council of Finance Ministers and the European Parliament.
At the March 2012 European Council, Member States asked the
Commission "to rapidly develop concrete ways to improve the fight against tax
fraud and tax evasion, including in relation to third countries".
As a first response to this request, the Commission adopted a
Communication in June, setting out key challenges posed by tax fraud and
evasion, and concrete measures to address them (see IP/12/697).
The Communication also announced that the Commission would
come forward with an Action Plan before the end of the year, along with specific
ideas on how to better tackle tax havens and aggressive tax planning.
This is what the Commission has presented today.
In addition to action at EU level, the Commission has also
underlined the need for Member States to improve tax compliance and the fight
against tax evasion nationally.
Ten Member States received country specific recommendations to
this end within the 2012 European Semester.