Tax evasion

The European Parliament today adopted a report setting out its demands for EU action to tackle tax evasion and avoidance ahead of tomorrow's summit of EU leaders, which is expected to address the issue. The Greens have long campaigned for tougher EU action on tax evasion and welcomed the report, which reflects many core Green demands. Commenting in the context of the debate on the summit, Greens/EFA co-president Rebecca Harms said:

"Tax evasion and avoidance deprives exchequers in EU member states of €1 trillion in revenue per year, according to the EU Commission. The failure to address this problem in the context of the current economic crisis is scandalous, all the more so given the growing acceptance that the exclusive preoccupation with contracting public spending has exacerbated problems in crisis countries. Robust action on tax avoidance would counterbalance this and EU leaders must finally agree concrete measures to this end."

Commenting after the vote on the EP report, Green economic affairs spokesperson Bas Eickhout stated:

“The EP has today sent a strong and timely message to EU governments to finally take meaningful action on tax evasion and avoidance. With heads of state and government meeting to discuss this €1 trillion problem tomorrow, they should move swiftly to implement some of the priority measures outlined in this report.

"Adopting a common definition for tax havens, blacklisting these havens and revising tax agreements, which facilitate tax evasion, must be a top priority. The European Commission has presented proposals to this end, which EU member states must swiftly enact.

"There is an urgent need to conclude the revision of key EU tax legislation, with a view to removing the loopholes that facilitate tax avoidance. EU governments need to speed-up decision-making on the EU common consolidated corporate tax base, as well as on the revisions of the parent-subsidiary and interest and royalties payments directives to this end. Unanimity decision-making on taxation is clearly frustrating progress, and we ultimately need to move to a more effective decision-making process but unfortunately MEPs lacked the courage to clearly state this.

"Accounting and ownership transparency is also crucial to combating tax evasion and MEPs have recognised this today in calling for the EU to 'codify offshore leaks' through a public registry of the beneficial owners of shell companies and trusts. Companies should be obliged to produce country-by-country reports, which would make their tax dodging strategies public. Whilst the EU has now introduced this for select sectors, there is a need to expand this to cover all industries, with sanctions for avoidance. A common European approach for addressing the harmful effects of tax evasion on developing countries is also needed, and we welcome today's vote to this end."

(1) The Greens presented a European tax pact - a call to action on European tax policy, setting out key measures to be taken at EU-level to address tax evasion and avoidance - to the Irish EU presidency in January: http://tinyurl.com/EU-Tax-Pact-ie