On Tuesday 21th May, the European Parliament adopted a resolution on the Fight against Tax Fraud, Tax Evasion and Tax Havens, being a continuation of a series of steps recently taken by European Union authorities (including 2012 Action Plan). The potential tax revenue lost to tax fraud, tax evasion, tax avoidance and aggressive tax planning is estimated to be one trillion Euro every year in the EU and is described by the Parliament as “scandalous”. The resolution defined tax fraud and tax evasion as constituting an illegal activity of evading tax liabilities, while, on the other hand, tax avoidance as the legal but improper utilisation of a tax regime to reduce or avoid tax liabilities. Aggressive tax planning consists in taking advantage of the technicalities of a tax system, or of mismatches between two or more tax systems, for the purpose of reducing tax liability. Lawmakers proposed a set of distinct solutions to facilitate combating harmful practices in the areas of tax fraud and tax evasion, tax avoidance and aggressive tax planning, tax havens and enhancing international cooperation in this respect.
Among others, the Parliament welcomed recent initiatives and urged Member States to follow up on their commitment to fight said practices. Moreover, it called on the Commission to refrain from granting EU funding, and to ensure that Member States do not provide state aid or access to public procurement to companies that breach EU tax standards. The resolution also suggested that audit firms alert national tax authorities to any signs of aggressive tax planning of companies being audited. Furthermore, the Commission was urged to compile and create a public European blacklist of tax havens by 31th December 2014.
On Tuesday 21th May, the European Parliament adopted a resolution on the Fight against Tax Fraud, Tax Evasion and Tax Havens, being a continuation of a series of steps recently taken by European Union authorities (including 2012 Action Plan). The potential tax revenue lost to tax fraud, tax evasion, tax avoidance and aggressive tax planning is estimated to be one trillion Euro every year in the EU and is described by the Parliament as “scandalous”. The resolution defined tax fraud and tax evasion as constituting an illegal activity of evading tax liabilities, while, on the other hand, tax avoidance as the legal but improper utilisation of a tax regime to reduce or avoid tax liabilities. Aggressive tax planning consists in taking advantage of the technicalities of a tax system, or of mismatches between two or more tax systems, for the purpose of reducing tax liability. Lawmakers proposed a set of distinct solutions to facilitate combating harmful practices in the areas of tax fraud and tax evasion, tax avoidance and aggressive tax planning, tax havens and enhancing international cooperation in this respect.
Among others, the Parliament welcomed recent initiatives and urged Member States to follow up on their commitment to fight said practices. Moreover, it called on the Commission to refrain from granting EU funding, and to ensure that Member States do not provide state aid or access to public procurement to companies that breach EU tax standards. The resolution also suggested that audit firms alert national tax authorities to any signs of aggressive tax planning of companies being audited. Furthermore, the Commission was urged to compile and create a public European blacklist of tax havens by 31th December 2014.