European Commission announces new anti-tax-evasion platform

In response to reports that tax evasion costs EU member countries up to €1 trillion (about $1.3 trillion) a year, Algirdas Šemeta, European Commissioner for Taxation, Customs, Statistics, Audit and Anti-fraud, announced Tuesday the establishment of a Platform for Tax Good Governance, Aggressive Tax Planning and Double Taxation. The Platform—a 45-member committee—is tentatively scheduled to have its first meeting June 10th.

“In battling tax evasion, we are battling to protect the fairness of our tax systems, the competitiveness of our economies and the solidarity of our Member States,” Šemeta said in a press release. “There is too much at stake for this battle to be lost. ... The Platform I am launching today will keep Member States on their toes. It will ensure results mirror expectations when it comes to fighting tax evasion.”

The Platform is one response to the Commission’s Action Plan against tax evasion issued in December.

The Platform will be charged with tracking the EU’s response to two problems highlighted in the Action Plan. First, it will follow progress on developing a strong EU stance against tax havens, going further than the international rules that currently apply. The report recommends that Member States adopt common criteria to identify tax havens and place them on national blacklists. The Action Plan said that merely having a country on the list sends out a strong signal.

Second, the report recommends ensuring that aggressive tax planning methods be thwarted by reinforcing the anti-abuse provisions in bilateral tax treaties and through national legislation and EU corporate legislation. The report defines aggressive tax planning as individuals or companies exploiting the technicalities of a tax system or the mismatches between national tax systems in a deliberate attempt to minimise the tax they pay. The EU has recommended that arrangements carried out solely for tax-avoidance purposes should be ignored and that companies should be taxed on the basis of actual economic substance instead.

Among the Platform’s tasks will be encouraging discussion amongst and gathering insights from business, civil society and national tax authorities’ experts about good governance in tax matters, aggressive tax planning and double taxation. The Platform will provide the Commission with information relevant to identifying priorities and to selecting the appropriate ways to achieve progress in these areas.

The 45 Platform members will consist of a high-level delegate from each EU member’s tax authority, plus up to 15 non-governmental representatives chosen by application to the director-general for Taxation and Customs Union. The non-governmental members will serve for three-year terms and then must reapply if they wish to continue to serve. The non-governmental representatives (whose applications must be sent by May 8th) are intended to be chosen from business, civil society and tax practitioner organisations. 

—Sally P. Schreiber (sschreiber@aicpa.org) is a CGMA Magazine senior editor.