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  • Service: Tax, International Corporate Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 6/27/2012

European Union - Concepts to address tax fraud, evasion 

June 27:   Concepts put forward today by the European Commission, to address tax fraud and evasion include:
  • Minimum sanctions for tax crimes
  • A cross-border tax identification number
  • An EU taxpayer's charter
  • Stronger common measures against tax havens

According to an EC release (IP/12/269, 27 June 2012), the size of the “shadow economy” is estimated to be nearly one fifth of GDP on average across EU Member States, representing nearly €2 trillion in total.


Given the globalization of the economy and technological advances, the EC reported that isolated national efforts to address the shadow economy will not work, and proposed a three-tier approach aimed to address tax fraud and evasion:


  • On the EU Member States national level—a focus on improving administrative capacity to collect taxes
  • On the EU level—agreement by EU Member States on the revised Savings Directive, and a possible European cross-border tax identification number, a quick reaction mechanism for VAT fraud, and minimum EU rules and sanctions for fraud and evasion
  • On the international level—stronger savings agreements with key neighboring countries

The EC will start work on developing the ideas set out in today's communication. Before the end of the year, the EC indicated that it will present an action plan on tax fraud and evasion, with specific measures that could be rapidly developed. In tandem, the EC will also develop its initiative on tax havens and aggressive tax planning.



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1801 K Street NW
Washington, DC 20006.
 

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