More research is needed to assess the impact of national legal instruments on tax intermediaries, say experts in a study commissioned by the European Parliament’s Subcommittee on tax matters (FISC), published on Monday 1 August.
The study provides an overview of the regulatory environment for tax intermediaries and presents a comparative analysis of five countries - Germany, Ireland, the Netherlands, Italy and the UK.
The study shows that many professions provide a tax advisory service: tax advisers, lawyers, accountants as well as bankers and wealth managers. Many disparities exist between countries.
The experts concluded that the impact of specific regulation of tax intermediaries on reducing tax evasion and undesirable tax avoidance remains unclear. There is insufficient data available to identify best practices on the various forms of regulation currently in place.
There is concern about the potential for over-regulation especially as there is some suggestion that the bulk of tax evasion and undesirable tax avoidance may be occurring among the small pool of tax advisers who are not members of any professional bodies. Experts underline that regulation needs to be targeted, so that this small pool of advisers can be identified and appropriate sanctions imposed.
The experts put forward three solutions to limit tax evasion and avoidance: - the development and implementation of an EU-wide Code of Conduct for tax intermediaries; - the introduction of mandatory Professional Indemnity Insurance; - the adoption of a more targeted approach to deal with tax intermediaries who enable undesirable tax avoidance.
One of the authors of the study, Professor Emer Mulligan of the University of Galway, had already recommended changes to the EU’s rules on tax advisers in a presentation to the FISC Subcommittee in June 2022 (see EUROPE 12981/27). However, the European Commission had stated that it does not intend to regulate the tax profession (see EUROPE 12974/9).
To read the European Parliament study: https://aeur.eu/f/2sk (Original version in French by Anne Damiani)