EU to Clampdown on Tax Havens
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The European Commission has announced measures to curb the estimated 1 trillion euros ($1.3 trillion) in annual tax evasion and avoidance, describing the phenomenon as a “scandalous loss of much-needed revenue” for the indebted eurozone region.
According to an estimate released by the European Union Commission on Thursday, up to 1 billion euros is lost tax dodgers each year while tens of billions of euros remain offshore, often unreported and untaxed.
The European Commission has announced measures to curb the estimated 1 trillion euros ($1.3 trillion) in annual tax evasion and avoidance, describing the phenomenon as a “scandalous loss of much-needed revenue” for the indebted eurozone region.
According to an estimate released by the European Union Commission on Thursday, up to 1 billion euros is lost tax dodgers each year while tens of billions of euros remain offshore, often unreported and untaxed.
Noting that aggressive tax planning by large multinational companies is a huge problem that requires urgent attention, the Commission called for a global and coordinated effort to equalise tax rules, adding that these are global challenges which “no single EU Member State can face alone.”
Related News: EU Steps Up Efforts to Tackle $1 Trillion in Annual Tax Evasion
Related News: Ultra Rich Hiding More Than $21 Trillion in Secret Tax Havens
As part of its two -pronged strategy, the Commission said member states should devise common criteria for identifying and blacklisting tax havens as well as adopt a common General Anti-Abuse Rule, under which they could ignore any artificial arrangement carried out for tax avoidance purposes and tax instead on the basis of actual economic substance.
Algirdas Semeta, EU Commissioner for Taxation, said:
[quote] In a Single Market, within a globalised economy, national mismatches and loopholes become the play-things of those that seek to escape taxation. A strong and cohesive EU stance against tax evaders, and those who facilitate them, is therefore essential. [/quote]
The Commission also called for a clampdown on what it called “harmful tax competition”, where member states compete with each other to provide the most benign tax environment, adding that it would come up with the “legislative proposals for action” if necessary.
When the new framework kicks in, Member States will have the possibility to get information on request on all other taxes from other countries in the EU.
More significantly, from January 2013, Member States will not be able to invoke bank secrecy to refuse giving information to another tax administration.
Related News: Swiss to Vote on Tax Breaks for Wealthy
Related News: Debt-Ridden Countries the Most Corrupt in Europe: Study
Related News: US Companies Boosting Dividends Ahead of Fiscal Cliff
