On July 5, 2016 the European Commission set out the next steps in its campaign to boost tax transparency in order to fight tax evasion and avoidance in the European Union.
In this respect the European Commission published a Communication from the Commission to the European Parliament and the Council - Communication on further measures to enhance transparency and the fight against tax evasion and avoidance (COM(2016) 451 final), a proposal for a Council Directive amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities (COM(2016) 452 final) and a set of Questions and Answers on measures to increase tax transparency and tackle tax abuse.
The Communication
The Communication outlines the progress made so far and the priority areas the European Commission has identified for action in the coming months, at EU and international level, to strengthen the fight against tax evasion, avoidance and illicit financial activity. In this respect the Communication discusses subjects that include a.o.:
· Progress made in the EU Agenda to enhance transparency and fight tax evasion and avoidance
o Increased Tax Transparency
o Fairer Taxation
· Tackling remaining challenges
o Harness the link between Anti Money Laundering and Tax Transparency rules
o Improve Information Exchange on Beneficial Ownership
o Increase Oversight of Enablers and Promoters of Aggressive Tax Planning
o Promote higher tax good governance standards worldwide
o Improve the protection of whistle-blowers
Harness the link between Anti Money Laundering and Tax Transparency rules
The Commission calls on the European Parliament and the Council to agree on the proposed amendments to the Fourth Anti-Money Laundering Directive without delay to improve the fight against terrorist finance and close important loopholes that have enabled tax evaders to escape detection when they channel funds offshore.
The European Parliament and the Council should also quickly agree to the proposed revision of the Administrative Cooperation Directive, which reinforces the synergies between EU anti-money laundering and EU tax transparency rules. This will ensure that tax authorities have access to vital information, at national level, allowing them to clamp down on tax evasion and avoidance through offshore funds.
Improve Information Exchange on Beneficial Ownership
The Commission has started to examine the most appropriate framework through which the automatic exchange of information on beneficial ownership could be implemented at EU level, to ensure that tax authorities have up-to-date and reliable information on companies and trusts abroad that are potentially relevant for them from a tax perspective.
The Commission will present a first analysis of the issue to Member States in the autumn and will, based on the feedback received, subsequently determine the appropriate next steps.
Increase Oversight of Enablers and Promoters of Aggressive Tax Planning
The Commission will explore the best way to increase oversight and ensure that effective disincentives apply for promoters and enablers of aggressive tax planning schemes13 . This could include, for example, increasing transparency on such schemes vis-à-vis tax authorities.
With this aim, in autumn 2016, the Commission will launch a public consultation to gather feedback on the most appropriate approach.
In parallel, the Commission will work closely with the OECD and other international partners on a possible global approach to greater transparency on advisors' activities, going beyond the recommendation in BEPS (Action 12).
Promote higher tax good governance standards worldwide
To facilitate the swift development of the EU list, the Commission is finalising a preassessment of all third countries, to determine the risk they may pose in terms of eroding the tax bases of Member States. It will present the results of this analysis to the Code of Conduct Group for Business Taxation before the summer. On this basis, Member States will be able to quickly identify the third countries that they wish to screen further from a tax good governance perspective and open a dialogue with the selected jurisdictions before the end of 2016.
The Commission will also work closely with the OECD for the development of an ambitious and effective international list of non-cooperative jurisdictions.
Improve the protection of whistle-blowers
With a view to strengthening the protection of whistle-blowers, the Commission is assessing the scope for horizontal or further sectorial action at EU level, while respecting the principle of subsidiarity.
Click here to be forwarded to the Communication from the Commission to the European Parliament and the Council - Communication on further measures to enhance transparency and the fight against tax evasion and avoidance (COM(2016) 451 final) as available on the website of the European Commission, which will open in a new window.
The proposal for a Council Directive amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities (COM(2016) 452 final)
The European Commission proposes to insert a paragraph 1a in Article 22 of Directive 2011/16/EU, which reads as follows:
“(1a) For the purpose of the implementation and enforcement of the laws of the Member States giving effect to this directive, and to ensure the functioning of the administrative cooperation it establishes, Member States shall provide by law for access by tax authorities to the mechanisms, procedures, documents and information referred to in articles 13, 30, 31, 32a and 40 of Directive 2015/849/EU of the European Parliament and of the Council”
Click here to be forwarded to the proposal for a Council Directive amending Directive 2011/16/EU as regards access to anti-money-laundering information by tax authorities as available on the website of the European Commission, which will open in a new window.
Set of Questions and Answers on measures to increase tax transparency and tackle tax abuse
The following questions are included in the set of Questions and Answers on measures to increase tax transparency and tackle tax abuse as published by European Commission on July 5, 2016:
· Why is the fight against tax evasion and avoidance a priority for the Commission?
· What has the Commission done to strengthen the fight against tax evasion and avoidance in the EU?
· Why has the Commission proposed more new tax transparency measures?
· What action will the Commission take with regard to tax advisors?
· Why is the Commission addressing the question of whistle-blowers in this Communication?
· What is the common EU list of non-cooperative tax jurisdictions?
· What progress has been made on the EU list and when will it be ready?
· What is the difference between the common EU tax list of uncooperative tax jurisdictions and the new EU anti-money laundering list of high risk third countries, to be adopted in the coming days?
· How do these new initiatives fit in with the international agenda against tax evasion and avoidance?
· How do your proposals on exchange of information on beneficial ownership relate to the initiative for a pilot project of Member States, as endorsed by ECOFIN?
Click here to be forwarded to the set of Questions and and Answers on measures to increase tax transparency and tackle tax abuse as published by European Commission on July 5, 2016.
Next to the documents discussed above the European Commission also adopted a proposal for a Directive of the European Parliament and of the Council amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and amending Directive 2009/101/EC (the Fourth Anti-Money Laundering Directive) in order to tackle terrorism financing, tax avoidance and money laundering and another set of Questions and Answers. Click here to be forwarded to a press release issued by the European Commission and attached to which you can find the proposal for amendment of the Fourth Anti-Money Laundering Directive and the relating set of Questions and Answers.
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