Consultations of the European Union concerning tax evasion
04.09.2012: The European Commission actually reconsiders its strategy to cope with tax evasion, especially with double non-taxation. WEED took part in two consultations.
In the field of fighting tax evasion there is some recent development at European level. . After decades of a clear focus by countries on avoiding double taxation, the Commission finally attempts to address the reverse problem: that a company profits from double non-taxation so that it has to pay no taxes. WEED sent a submission on the consultation. Subsequently, the commission staged a public consultation in July, in which, besides the double non-taxation, the general approach of the European Commission towards tax evasion was discussed. The discussion was based on a draft for a discussion paper "Discussion paper on possible future measures against non-cooperative jurisdictions and aggressive tax planning and a possible strategy at EU level”. As a follow-up to the public consultation a group of ten organisations, amongst them WEED, handed in a submission, with the following core demands:
1. Adopt an EU definition of tax haven. Such definition should build on the agreement reached by the European Parliament and the Council in the framework of the AIFM Directive; but to be complete it should also include other criteria like preferential treatment to non-residents and secrecy regulations that are both essential features of non-cooperative jurisdictions or tax havens. Such definition should also be applied to EU jurisdictions.
2. The toolbox should be complemented with other incentive and offensive measures, including a "full” country by country reporting requirement at EU level; automatic cross-border exchange of tax information; and alternative options for the taxation of multinational enterprises (e.g. unitary taxation and thin capitalisation).
3. Pay greater attention to the role of multinational corporations, major players and users of noncooperative jurisdictions, and the impact of non-cooperative jurisdictions on developing countries, most of which lack the resources to effectively fight against tax evasion and aggressive tax planning. The Commission should explore ways to strengthen tax administrations in developing countries and ensure the implementation of the principle of Policy Coherence for Development.
It remains to be seen if the Commission will take this public exchange of views serious and will take up the demands of civil society, or if they will stick to their usual industry- and capital-friendly course.