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Today’s Top Headlines




European Commission Announces New Anti-Avoidance Measures

by Ulrika Lomas, Tax-News.com, Brussels

06 July 2016

In response to the publication of the Panama Papers, the European Commission has proposed new measures to improve transparency and better facilitate the exchange of information between tax authorities.

Tax Commissioner Pierre Moscovici said: "The recent leaks exposed loopholes that still allow tax evaders to hide funds offshore. These loopholes must be closed and our measures to stamp out tax abuse must be intensified. The Commission is determined to inject more openness and more trust into taxation. We have already come a long way and now is the time to go further. The EU's tax transparency campaign continues."

He explained that there are three strands to the Commission's plan to crack down on aggressive tax avoidance. They are: providing tax authorities with "crucial information on the individuals behind any company or trust"; creating "more transparency around the activities of tax advisors, and more scrutiny of those that promote aggressive tax planning schemes"; and taking "a tougher stance against countries that allow offshore funds to be used for illicit purposes."

The Commission's priorities are set out in a Communication issued on July 5. It proposed:

  • That the Directive on Administrative Cooperation in the field of taxation be amended to give tax authorities access to national anti-money laundering information, particularly beneficial ownership and due diligence information;
  • That the Anti-Money Laundering Directive be amended to subject existing, as well as new accounts, to due diligence controls, and to subject passive companies and trusts to greater scrutiny and tighter rules;
  • That the Commission examine how EU member states could automatically exchange their national information on beneficial owners of companies and trusts with a potential tax impact;
  • That the Commission examine how to shed more light on tax advisors' activities and create effective disincentives for those who promote and enable aggressive tax planning;
  • That the Commission work with the European Council's Code of Conduct Group on establishing a list of uncooperative tax jurisdictions, by identifying the most relevant countries to screen under the compilation process, with a view to having the first list ready in 2017; and
  • That the Commission assess the need for new measures to increase protection for whistleblowers, in addition to the protections already in place in sectorial legislation, such as that on market abuse.

Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, said: "Tax avoidance can cost the public purse many millions of euros each year. Understandably, people and businesses want tax to be fairer and more effective. To do so, we are working together at European level to make the system more transparent, making it difficult for potential tax evaders to move profits elsewhere. The Panama Papers scandal helped to focus minds and speed up this work."

TAGS: individuals | tax | business | European Commission | tax avoidance | trusts | offshore | legislation | tax planning | Panama | Europe | Tax

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