According to estimates by the European Commission, EU Member States lose about EUR one billion each year through tax evasion and tax avoidance. The Commission therefore introduced a package of measures at the end of last year, which shall reduce the loss of tax revenue. The Committee on Economic and Monetary Affairs of the European Parliament has now presented a draft report on the Commission package, which, even though supporting the course taken by the Commission, requires further action.
Kleva Kekuš of the Social Democrats, the MEP in charge of the report, estimates the loss of tax revenue at about EUR 2,000 Euro per EU citizen and year. According to her, national measures against tax fraud are not sufficient. A European tax strategy was crucial; however, the Commission had to advance further relevant legislative proposals. Apart from that, it was absolutely essential to take action at international level – the European Union had to start negotiations with third countries. She strongly criticised those companies, which, during the course of aggressive tax planning, would not fulfil their tax obligations. Banks should lose their license if they contribute to their customers’ fraudulent activities, be it directly or indirectly. Any tax fraud had to be prosecuted. With regard to tax oases, Kleva Kekuš demands, following the example of the OECD, that the European Union introduces a Black List for countries that support tax flight. She criticised the Council, as EU Ministers would block any proposals against tax flight here.

With regard to combatting tax evasion, the EU representative Sirpa Pietikäinen of the European People’s Party also urges the EU to play a more active role at international level. She too demands criminal charges to be brought in case of tax fraud. Important steps among other would be a common consolidated basis of assessment for corporate tax, obligatory cooperation between tax authorities, a European tax number, changes to licence rules or adjustments to the Parents-Subsidiary Directive. Apart from that, there should be no tax oases for double tax agreements.

The liberal Greek MEP Theodoros Skylakakis has his very own opinion on the subject of tax evasion: tax flight was a particular risk for peripheral economies. Tax loopholes had to be closed, whereby the additional revenue should be used for cutting taxes. New expenditure would only create a socialist state. Lower taxes shall attract investors.

The Green MEP Bas Eickhout criticised that the subject of tax oases would unfortunately never result in concrete measures. The European Union had to cooperate in order to be successful. The Left EU representative Thomas Händel considers the Communication by the Commission hesitant, because the intention is to re-evaluate, discuss and postpone. Double tax agreements by countries that do not comply with standards in respect of tax honesty shall be terminated. Tax dumping and tax competition at the expense of societies, commented Händel, had to be stopped.

The adoption of the parliamentary report is expected for May or June. However, due to the fact that the European Parliament has no co-decision powers in respect of tax policy, attention is above all focussed on the negotiations in the Council. However, the discussions between EU Finance Ministries will be anything but easy as tax policy is one of the few sections where the principle of unanimity still applies: the proposal by the Commission will fail if only one country is opposed to new tax measures.