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The two draftspersons of the Special Committee on financial crimes, tax evasion and tax avoidance have published first findings and recommendations on Wednesday.


The draft report put forward by MEPs Luděk Niedermayer (EPP, CZ) and Jeppe Kofod (S&D, DK), calls for an urgent reform of outdated international and national tax rules. It contains recommendations on fighting tax avoidance, evasion and aggressive tax planning, revamping corporate taxation, stenghtening anti-money laundering actions, fighting VAT fraud, and better protecting whislte-blowers and journalists.


The draft report will soon be available here.


A press conference by the two draftspersons will take place on Wednesday at 12.00, noon in Strasbourg and can be followed Live.


In written comments the draftspersons said:


Luděk Niedermayer (EPP, CZ)


In the fight against money laundering, tax evasion, tax fraud and aggressive tax planning, the EU has been gradually closing loopholes and providing tax and other authorities with powerful tools and data. However, we will only see improvement, if the authorities use the available tools effectively and strengthen cooperation within and between Member states.


While progress has been achieved, Member States still have to agree on crucial elements to a modernized legal framework for better taxation, such as the Common Consolidated Corporate Tax Base (CCCTB), the definitive VAT reform or the rules for taxing digital activities.


It is not only the issue of double non-taxation that needs to be eliminated, but also that of double taxation in order to create a stable and predictable environment for honest tax payers. The solution goes, for example, through well-functioning bilateral double taxation treaties, effective dispute resolution mechanisms, and efficient administrative cooperation and exchange of information.


Jeppe Kofod (S&D, DK)


Anti-money laundering provisions in Europe are a loose patchwork blanket of EU and national rules. The blanket clearly doesn’t cover all it needs to and the patches don’t quite line up, leaving loopholes. These enabled large-scale money laundering through some European banks.


The cases investigated by the Committee have shown that cooperation between Member States’ authorities remains shockingly inadequate. From the CumEx-files to Danske Bank, we have seen a pattern of slow, lacking and outright dysfunctional cooperation. This is in clear violation with Treaty provisions and must be addressed urgently by the Commission and Member States.


Our report presents concrete ways to do so, e.g. by appointing Single Points of Contact in all EU Member State tax authorities and the possible centralisation of anti-money laundering supervision via an existing or new EU body, to enforce strong and harmonised rules and practices.


This would give Member State authorities a single point of contact, making it possible to immediately warn all Member States in cases of serious cross-border economic crimes. Finally, we present a clear call for the effective abolishment of Golden Visa schemes in EU Member States.


Next steps


The draft report will be up for its official presentation and discussion on 27 November. The committee will also continue with its hearings and fact-finding visits. At the same time, work will be kicked off between the political groups to fine-tune the report with a vote to adopt it in committee expected in early 2019.


Background


Following continued revelations over the last five years (Luxleaks, the Panama Papers, Football leaks and the Paradise papers), the European Parliament decided to establish a Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3), on 1 March 2018.


The TAX3 committee, chaired by Petr Ježek (ALDE, CZ), builds on the work of its predecessors (the TAXE, TAX2 and PANA Committees) and is also looking into new issues, such as digital taxation, national citizenship programmes and VAT fraud.


During its twelve-month mandate, the committee is examining and assessing whether further progress has been made in combatting financial crimes, tax evasion and tax avoidance. To do this, numerous hearings with experts and fact-finding missions are being organised regularly. The committee will conclude its work with a report containing its findings and recommendations.