Tax Offenders Face Comeuppance in EU

(CN) - The Council of the European Union announced plans to fight tax evasion and fraud across the EU amid demands for more regulatory action.

As economic and budgetary crises deepen across Europe, lawmakers and member states have been struggling to fight tax cheats. Without announcing concrete details, the Brussels-based council noted that future legislation will likely focus on off-shore accounts as well as Europe's shrinking VAT, short for the value-added tax on goods and services that drives most EU funding.

"The council takes the view that, when prioritizing steps to fight tax evasion and fraud, it will be important to pay attention to both the area of direct and indirect taxation, without connecting them, and to concentrate on actions for the short term," the council said in a statement. "Action at the level of member states will be essential to fight tax fraud and evasion, but common efforts should also be made at EU level in areas where this would add value, increase coherence and efficiency of tax collection and help closing loopholes."

While shutting down third-country tax havens and fighting VAT tax evasion are priorities, lawmakers say the European Commission went too far in calling for administrative and criminal sanctions and joint audits.

"Particular attention should be paid to the efficient and cost-effective implementation of already existing EU legislation and IT systems, as well as to burdens on businesses and tax administrations," the council said. "Beyond legislative instruments the EU should consider pragmatic tax coordination at the level of the council and support, where appropriate, coherent action in relation to third countries, while taking relevant work in international fora into account. Furthermore, the EU should support the dissemination of best practices with regard to the national systems for enforcement of tax laws and effective collection of taxes."

Lawmakers said that the issue has been submitted to the council's tax committee for further discussion. The European Commission expects to present its action plan and findings on tax havens and "aggressive tax planning" by the end of the year.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit