Exec braces to tackle tax havens and aggressive tax planning
By Tanguy Verhoosel | Monday 19 November 2012
The European Commission will present, on 5 December, an action plan to combat tax fraud and evasion in the EU. It will propose, among other measures, that the 27 tackle head-on tax havens and aggressive tax planning.
The EU executive estimates that tax optimisation techniques used by multinationals and tax evasion by individuals result in high levels of lost revenue for the EU member states, comparable to losses in the United States: the relocation of business profits to tax havens, where they are taxed at very low rates or not at all, is thought to cost some US$60 billion (€48 billion), and tax evasion is estimated to cost US$50 billion (€40 billion).
To remedy this situation, the Commission proposes that the 27 adopt an action plan, a provisional version of which was previewed by
Europolitics.The text will be reworked further in the light the results of the just completed inter-service consultation.
It makes a distinction between the implementation of certain existing initiatives, the adoption of measures that can constitute an “immediate response” to the problem and actions to be taken over the short term (by the end of 2013), medium term (by the end of 2014) or long term (after 2014).
The Commission stresses the need to ensure proper use of existing legislative instruments to improve administrative cooperation between tax authorities (Directive 2011/16/EU, which provides for automatic information exchange on certain income and financial products, for example). It also urges the 27 to come to agreement “without delay” on revision of the Savings Taxation Directive and the anti-fraud agreement concluded with Liechtenstein and to adopt certain proposals to reduce the scope of VAT fraud (use of rapid response mechanisms and the reverse charge procedure).
On 5 December, the Commission will also announce new initiatives.
It will send the member states two recommendations, one on tax havens (adoption of a common definition and creation of a ‘toolbox’ of defensive measures) and the other on aggressive tax planning (reinforcement of preventive double-tax conventions and adoption of a general anti-abuse clause).
It will also call for immediate strengthening of the EU code of conduct on business taxation (its scope should be extended to special schemes for expatriates, wealthy individuals and shareholders) and will present two new instruments to improve administrative cooperation in the area of direct taxation: the European TIN (taxpayer identification number) portal and a regulation establishing standard forms for information exchange.
The Commission announces that it will take additional steps by December 2013 (revision of the parent-subsidiary and money laundering directives, drafting of a European taxpayers’ charter, promotion of joint tax inspections, etc). Others will follow by December 2014 (on the traceability of financial flows, the creation of a European taxpayer identification number, extension of the Eurofisc system to direct taxation, alignment of administrative and criminal sanctions for tax offences, etc).
The executive plans to relaunch work after 2014 in certain areas not seen as priorities by the 27: creation of a methodology for joint audits, facilitation of direct access to national databases and a proposal for a single legal basis for administrative cooperation for all taxes).
Documents are available at
www.europolitics.info > Search = 324715
On 5 December, the Commission will announce new initiatives