Brussels, 21/05/2013 (Agence Europe) - The fight against fraud and tax evasion is at the core of the major tax chapter to be discussed at the European Council scheduled to meet in Brussels on Wednesday 22 May. The heads of state and/or government will call for swift progress to be made in this respect at national, European and global levels and their discussions are expected to serve as preparation for a strong and coordinated EU stance within relevant international bodies (G8, G20 and OECD), as well as in talks with international partners. The European Commission is also associated with this call, and it has tabled numerous proposals before the Council with others coming up very shortly. The European Parliament also plays a part and has recently passed a resolution in which it proposes concrete measures against fraud and tax havens, demanding a 50% reduction in the tax revenue forgone by 2020.
In practical terms, in their draft conclusions: (1) the heads of state and government call for extension of the automatic exchange of tax information (AEI) at EU level and at global levels. At EU level, the Commission will, in June, propose amendments to the directive on administrative cooperation in order for the AEI to cover a full range of income from 2015 on - income that had not hitherto been covered (income from work, pensions and insurance, as well as dividends and capital gains). In a speech addressing the EP on Tuesday, Commission President José Manuel Barroso announced, moreover, that he will try to obtain an agreement at the summit on the principle for the automatic exchange of information for all forms of income from 2015 on. At the external level, the heads of state and government commit to the EU playing a leading role to support the AEI as an international standard and to develop a coordinated position to achieve this in the relevant international bodies (see above). The heads of state and government note the general consensus reached at the last Ecofin Council on extending the area for application of the revised directive on savings tax to other savings products (insurance, etc.) and to other entities (trusts, foundations, etc.), and call for the adoption of the revised directive by the end of the year. The directive in fact remained blocked at Ecofin due to opposition from Luxembourg and Austria which still link their approval to preliminary acceptance of the claims set out in the revised directive (including AEI) by their main European rivals (Switzerland, Monaco, Andorra, Liechtenstein and San Marino) in the context of negotiations to be opened with the Commission for review of their bilateral tax agreements with the EU. The draft conclusions request that those talks begin as soon as possible, after the adoption of the negotiating mandate granted to that effect to the Commission, during the last Ecofin Council (see EUROPE 10846). (2) The heads of state and government call on member states to apply, as a matter of priority and in a concrete manner, the measures contained in the action plan for combating fraud and tax evasion presented by the Commission in December 2012 (see EUROPE 10746) and indicate that work will be continued on its two recommendations concerning the fight against aggressive tax planning and the export of profits. The heads of state and government note the presentation made by the Commission by the end of the year of a proposal for revision of the “parent/subsidiary” directive and revision of the anti-abuse provisions in relevant EU legislation. In the same field, they call for work to be continued to combat harmful tax practices and to strengthen the code of conduct on corporate tax. In respect of the fight against VAT fraud, the heads of state and government urge the Council to adopt, by the end of June, the directives on the rapid reaction mechanism and the reversal of the burden of proof (see EUROPE 10667). The draft conclusions acknowledge, moreover, the need to carry out an overall fight against tax evasion and laundering both at the level of the EU and vis-à-vis third countries that fail to cooperate by identifying final beneficiaries and nominees (shell companies, trusts, foundations). The heads of state and government recommend on this level the adoption of the third directive against money laundering before the end of the year and the rapid examination of proposals amending directives on the divulging of non-financial information by the major companies. Finally, before discussion by the summit on the digital agenda, in October this year, the Commission will tackle the taxation problems of the digital economy. The Council will report to the summit in December on progress made on all these points.
With massive adoption of the report by Slovene Socialist Mojca Kleva Kekus ahead of the summit, the EP strengthens the wishes of leaders by calling for: - development by the Commission of a blacklist of tax havens on the basis of criteria that are stricter than OECD criteria; - coordination of fiscal policies to combat taxation dumping; - harmonisation of the tax bases, mainly for the corporate tax base; - ambitious talks with third countries on rolling out the AEI; - publication by multinationals of taxes paid in each member state; - severe penalties for fraudsters and intermediaries that promote fraud; - and a fairer redistribution of fraudulent funds recovered. (FG/transl.jl)