The European Commission has released a package of measures to tackle the estimated €1.3 trillion lost to tax evasion and fraud in Europe, against a background of alleged avoidance amongst major companies.
Algirdas Šemeta, the taxation and anti-fraud commissioner, told reporters in Brussels yesterday (6 December) this was a “scandalous loss of public income particularly in tough economic times”.
He said the action plan set out 30 new measures to close loopholes and increase information exchange, and called on EU countries to implement the current EU code of conduct on business taxation as soon as possible.
Faced with different national fiscal regimes, politicians had urged the Commission to adopt an EU-wide approach.
“In a single market, within a globalised economy, national mismatches and loopholes become the play-things of those that seek to escape taxation”, Šemeta said.
The first of the two main recommendations requires member states to take a strong stance on tax havens, going beyond the current international measures. The EU executive urged countries to identify such havens, place them on national blacklists and take their complaint to the Commission.
The second suggests ways for member states to address “aggressive tax planning”, the legal technicalities and loopholes companies use to pay less tax.
EU countries should also adopt a common anti-abuse rule, whereby they can ignore artificial tax avoidance schemes and tax the underlying sum of money, said a statement accompanying the announcement.
Šemeta said he would also push for fiscal standards outside the EU. “Today's Action Plan will serve as a robust EU contribution to the international debate on evasion and avoidance, particularly within the OECD and G20”, a Commission statement said.
"There is no reason why other countries should not respect the same minimum standards", he told reporters.
The Commissioner expressed frustration that some companies had been exploiting current divergences in national tax regimes.
The EU executive is currently pursuing an infringement procedure against France and Luxembourg for placing too low VAT rates on digital books. The Commissioner made specific reference to the retail giant Amazon, which is alleged to have placed its headquarters in Luxembourg in order to take advantage of the weaker tax regime.
The coffee juggernaut Starbucks announced yesterday that it would pay £10 million (€12.4 million) over the next two years as it restructures arrangements that have seen its UK operation pay no corporation tax in the past three years.
Starbucks is reported to have paid just €10.7 million in corporation tax since it opened in the UK in 1998 despite sales of €3.7 billion.