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MEPs Approve PANA Committee Tax Recommendations

by Ulrika Lomas, Tax-News.com, Brussels

15 December 2017


Members of the European Parliament (MEPs) have approved the recommendations made by the European Parliament's special committee on tax avoidance and evasion, calling for open registers of beneficial owners, effective protections for whistleblowers, and new rules for intermediaries.

On December 13, MEPs approved the recommendations made by Parliament's Special Inquiry Committee into Money Laundering, Tax Avoidance, and Evasion (PANA), by 492 votes to 50 with 136 abstentions. The committee was set up in June 2015 in the wake of the publication of the so-called Panama Papers.

According to the text adopted by MEPs, the Panama Papers "have shaken citizens' trust in our financial and tax systems." MEPs stressed that it is now crucial "to restore public confidence and ensure fair and transparent tax systems and tax and social justice."

The text called upon the EU and its member states to "properly implement and reinforce their legal tools to shift from secrecy to transparency, mutual cooperation, and exchange of information, and to counter money laundering more effectively."

Among the recommendations made by the PANA committee and endorsed by MEPs were:

  • "regularly updated, standardized, interconnected, and publicly accessible" beneficial ownership registers of companies, foundations, trusts, and similar legal arrangements;
  • new rules to regulate intermediaries (such as lawyers and accountants) who aid aggressive tax planning, along with "incentives to refrain from engaging in tax evasion and tax avoidance";
  • tools to support whistleblowers, to ensure that they are given effective protection and financial assistance;
  • "dissuasive" penalties at both EU and national levels against banks and intermediaries "that are knowingly, wilfully, and systematically involved in illegal tax or money laundering schemes"; and
  • a common international definition of what constitutes an offshore financial centre, tax haven, secrecy haven, non-cooperative tax jurisdiction, and high-risk country.

A major, separate recommendation made by MEPs was for a change in how EU member states decide upon tax policy. Currently, there must be unanimity among member states, but MEPs want to see that replaced by qualified majority voting in the European Council. A qualified majority needs 55 percent of member states, representing at least 65 percent of the EU's population.

Co-rapporteur Petr Jezek said: "The PANA committee investigations built on the journalists' revelations [in the Panama Papers] with the aim of keeping up momentum, scrutinizing relevant EU legislation and its implementation, and coming up with credible recommendations on how to tackle money laundering, tax avoidance, and tax evasion."

"Today, we have reached these goals. In the coming months, it will be crucial to maintain pressure as regards implementation of the recommendations and additional pressure on those governments which are still not fighting the good fight."

The report and recommendations of the PANA committee will now be passed to the European Council and Commission for their consideration.

TAGS: tax | European Commission | tax avoidance | law | trusts | corporation tax | tax authority | offshore | legislation | tax planning | penalties | European Union (EU) | Panama | Europe | Tax | Tax Evasion | BEPS

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