Commission presents far-reaching anti-tax evasion measures

Algirdas Šemeta, Member of the EC in charge of Taxation and Customs Union, Audit and Anti-Fraud. (EC Audiovisual services).

Algirdas Šemeta, Member of the EC in charge of Taxation and Customs Union, Audit and Anti-Fraud. (EC Audiovisual services).

As from January 2015 dividends, capital gains and all other financial incomes and bank account balances will be added to the currently existing restricted list of categories subject to the automatic exchange of information between the EU tax authorities, according to a proposal by the EU Commissioner Algirdas Šemeta. Practically today only interest on bank deposits (not account balances) paid in another EU country is reported to the tax authorities of an EU citizen’s residency.

This is a major breakthrough in fighting tax evasion in the European Union. By this bold move Šemeta exerts strong pressure on the few countries which disagree with this new approach. In this respect it will be very interesting to observe the reaction of some member states, which in the face of it appear as leaders in anti-tax evasion campaign, but in reality are quite reluctant to transmit information on foreign citizens’ incomes earned in their territory.

Up to now only Austria, Luxembourg and Malta have expressed reserves over the extended automatic exchange of information between the EU tax authorities. In reality though it is Britain with the City of London financial centre that make the most out of offering opportunities to world’s tax evaders. Under the new Commission proposal the British tax services will be obliged to interfere in foreign citizen’s financial transaction in their territory and report the results of their investigation to the tax authorities of another EU member state.

Who cares most

Consequently this Commission proposal will expose the hidden interests of certain EU member countries, in respect with the lucrative business of tax evasion. On top of that the results of this EU discussion will be also heard loudly in the G8 and G20 conference rooms, since those groups have placed anti-tax evasion action on the top of their agendas.

As Šemeta said, “At first glance, this might seem to be a purely technical adjustment to administrative cooperation rules”. Obviously it is not. Of course it is not yet clear what kind of incomes and capital gains will be finally included in the automatic exchange of information between the EU tax authorities. If however it will be an unobstructed exchange on all income and capital gains earned by residents in another EU member state, then this ‘technical’ extension becomes quite substantial.

The scope of the mandatory exchange of information between member states is obviously of fundamental importance. In this respect the Commissioner reminded that as from next year the FATCA agreement will oblige Member States, to transfer extensive data to the US authorities on the accounts of US citizens in their territory.
In view of that Šemeta observed that “under EU law, we have a “most favoured nation clause”, to ensure that Member States share as much information with each other as they do with any non-EU country”. It will be a shame however if the FACTA will be more effective than the obligations of EU member states between each other stemming from EU proper legislation. As a result the Commission wants to ensure that the automatic exchange of information within the EU matches and even goes beyond than FATCA. This is another reason for this bold action by the Commission.

The good Commissioner knows however that those things are much more complicated that they seem. He said “Many Member States had expressed a desire to do this under a “pilot project” of bilateral and multilateral exchange agreements”. He added then that, “I firmly believe that an EU approach is better than a patchwork of bilateral arrangements”.

It goes without saying that this approach adopted by certain member states comes under the issues raised above, in respect with Britain that is to reduce the scope of information exchange. Knowing all that the Commission is now ready not only to place all EU member states before their obligations, but to extend this to the G8 meeting next week. To this effect next week, “President Barroso will press our international partners to do the same” concluded the Commissioner.

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Who gains when the US and China fight over trade?

Indigenous peoples ‘lag behind on all social and economic indicators’: UN deputy human rights chief

Dieselgate: Parliament calls for mandatory retrofits of polluting cars

Why COVID-19 could mean a new dawn for Nigeria’s manufacturing sector

Affordable, accessible and safe medicines for all: the Commission presents a Pharmaceutical Strategy for Europe

Fake news: What it is, and how to spot it

Eliminating hepatitis calls for ‘bold political leadership, with investments to match,’ UN health chief says

Making the move to more sustainable mobility – three steps for companies

Statement on the Code of Practice against disinformation: Commission asks online platforms to provide more details on progress made

The hidden risks nature loss poses for businesses

5 ways to break down the barriers for women to access leadership roles

Why is Grexit again in the news? Who is to pay for Eurozone’s banking problems?

Environment and health at increasing risk from growing weight of ‘e-waste’

Who is to lose from the 6-month extension of the EU economic sanctions against Russia?

5 lessons from China on how to drive sustainable growth

Coronavirus: the truth against the myths

How can we overcome the racial barriers to global health parity?

What happiness can teach us about how we measure human development

The world invested almost $2 trillion in energy last year. These 3 charts show where it went

90% of fish stocks are used up – fisheries subsidies must stop

“We always honor our words, and in that respect we expect our partners to honor their words as well”, China’s State Councillor and Foreign Minister Wang Yi highlights live from Brussels

Medschool 4.0: how to succeed in the smart revolution of healthcare

From fishing village to futuristic metropolis: Dubai’s remarkable transformation

Is the ECB ready to flood Eurozone with freshly printed money?

What people want – ignore at your peril

Crimea, a wicked game of political chess and a ‘big’ coincidence

EU unfolds strategy on the Egypt question

Antitrust: Commission fines Google €1.49 billion for abusive practices in online advertising

Promoting Primary Health Care to the Young Health Workforce: a new approach

Back to the future: flying cars are becoming a reality

Iraq: Over 150,000 children endangered by ‘freezing’ temperatures, warns UNICEF

The world’s most expensive places to own a home

FROM THE FIELD: Keeping Morocco’s indigenous culture and conservation in balance

Wednesday’s Daily brief: Day 3 of anti-hatred summit, UNFPA turns 50, Ben Stiller #WithRefugees, updates on Abyei

Civilians ‘continue to pay highest price’ in Ukraine conflict, with peace prospects losing ‘momentum’

EU approves close to €240 million to strengthen resilience in neighbouring countries hosting Syrian refugees in light of the coronavirus pandemic

“Health and environment first of all”, EU says with forced optimism after 7th round of TTIP talks

Four ways we can fix economics in 2019

The Sahel is engulfed by violence. Climate change, food insecurity and extremists are largely to blame

IFMSA and IPSF on the Health of Migrants and Refugees

Ukrainian civil war: Is this the beginning of the end or the end of the beginning?

Why South Africa is on a path of economic renewal

What is hydroponics – and is it the future of farming?

Will Qualcomm avoid Broadcom’s hostile takeover post the 1 bn euro EU antitrust fine?

Eurozone’s bank resolution mechanism takes a blow

How data residency laws can harm privacy, commerce and innovation – and do little for national security

This project wants to bring broadband – and hope – to rural India

This massive project in Spain is the latest milestone in Europe’s solar power boom

Trump: Hostile to Europe, voids Tillerson’s “ironclad” ally pledge

‘Embrace the transformation’ to a carbon-neutral world by 2050, UN chief tells COP25

Juncker Plan reaches almost €410 billion in triggered investment across the EU

Here are 4 ways investors can influence more secure and responsible innovation

Ben Stiller’s new role, more about hope than humour, as he’s named Goodwill Ambassador for UNHCR

The best companies to work for in 2020, according to Glassdoor

5 ways to integrate Syrian refugees into the workforce

The EU prepares for the end of LIBOR: the Commission welcomes the agreement reached between the European Parliament and the Council on financial benchmarks

Global public-private collaboration tackles cybersecurity skills gap

EU Budget 2021 deal: supporting the recovery

Managers’ pay under fire

What little Cameron got in Brussels seems enough to keep Britain in the EU

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s