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EU To Crack Down On Promotion Of Aggressive Tax Planning

by Ulrika Lomas,, Brussels

11 November 2016

The European Commission has launched a public consultation on how best to deter promoters of aggressive tax planning schemes.

The Commission said it is particularly interested in gathering views on how a mandatory disclosure scheme for tax advisers could be put in place. If implemented, this would require intermediaries to provide early information on schemes that could be viewed as aggressive or abusive planning for tax purposes.

In May, the European Council asked the Commission "to consider legislative initiatives on mandatory disclosure rules inspired by Action 12 of the OECD BEPS project with a view to introducing more effective disincentives for intermediaries who assist in tax evasion or avoidance schemes."

The Commission said: "Many companies and individuals rely on intermediaries to design financial structures that help them to avoid paying their fair share of tax. These intermediaries can include consultants, lawyers, financial and investment advisers, accountants, financial institutions, insurance intermediaries, and agents who set up companies. Schemes formulated by these intermediaries can often lead to a loss in tax revenues for government coffers."

The Commission explained that the consultation will help to decide whether it is appropriate to introduce binding rules at an EU level and, if so, what the most suitable legal instrument should be.

Tax Commissioner Pierre Moscovici commented: "Complex financial schemes and opaque corporate structures do not happen by accident: some intermediaries have developed these into an art-form. These experts offer their clients the opportunity to aggressively exploit loopholes or to shift their profits so as to substantially reduce their tax bill. The public consultation we're launching today will help us to work out ways to deter intermediaries from designing such schemes and to give our member states greater insight and information to enable them to put a stop to them."

The consultation will run until February 16.

TAGS: individuals | tax | investment | European Commission | value added tax (VAT) | tax avoidance | law | insurance | Organisation for Economic Co-operation and Development (OECD) | tax authority | tax planning | European Union (EU) | Europe | Tax | Tax Evasion | BEPS

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