Against the backdrop of the economic crisis, the fight against tax evasion is taking on growing importance in the EU. The European Parliament will debate the subject, on 18 April, before adopting a resolution the following day calling for tightening up EU rules on savings taxation without delay.

The S&D group is behind the debate and vote on this resolution, following its study on tax fraud, published on 29 March (see Europolitics 4375).

The study by Richard Murphy, director of Tax Research UK, estimates that some €1,000 billion per year in tax revenues are lost in the 27 member states due to tax evasion and tax avoidance - the use of abusive strategies to minimise taxation due. On releasing the study, the S&D urged EU leaders to halve tax evasion by 2020, noting that this financial gulf strains member state finances and “affects public investments, growth and employment”.

“Combating tax evasion should be a key priority for the Union. A lot has been said but little has been done so far,” S&D group leader Hannes Swoboda (Austria) said in a statement, released on 16 April. “In their effort to reduce budget deficits, EU governments have mainly focused on cutting spending. Now they should act on increasing their tax revenues. Paying taxes is a basic civic duty. Everyone should contribute to the cost of the crisis. It is a matter of social justice,” adds the group spokeswoman, Elisa Ferreira (Portugal).

FIFTEEN PRIORITIES

The joint draft resolution being discussed by the different political groups, ‘Call for concrete ways to combat tax fraud and tax evasion’, identifies 15 priorities.

The text highlights the need for widespread application of automatic information exchange between tax administrations in order “to end banking secrecy”.

The EU’s Savings Taxation Directive should be revised and an “early agreement” reached with Switzerland, it continues, noting that “in general,” the member states should refrain from working out bilateral arrangements with third countries, a reference to the Rubik agreements signed by Germany, the United Kingdom and Austria with Berne. More broadly, “a complete strategy against tax havens should be developed on the basis of strict EU criteria”.

Referring to the conclusions adopted by the 27 heads of state and government, on 2 March, the draft resolution also calls on member states to step up their cooperation on eliminating cases of double non-taxation and to improve the fight against tax fraud. It stresses the “key role” that could be played in this area by the introduction of a common consolidated corporate tax base (CCCTB). The report on this subject by Marianne Thyssen (EPP, Belgium) will be debated in Parliament, on 18 April, and put to the vote in plenary, on 19 April.

The draft resolution on combating tax fraud and tax evasion also recommends a revision of the EU directives on parent companies and subsidiaries and on cross-border interest and royalty payments between associated companies. Also in the area of business taxation, the resolution recommends tighter rules and more transparency on trusts and the implementation of “innovative strategies to combat VAT fraud”.

“A lot has been said but little has been done so far,” S&D group leader Hannes Swoboda