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Procedure : 2009/0004(CNS)
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Texts tabled :

A7-0006/2010

Debates :

PV 08/02/2010 - 14
CRE 08/02/2010 - 14

Votes :

PV 10/02/2010 - 9.3
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Texts adopted :

P7_TA(2010)0013

Debates
Monday, 8 February 2010 - Strasbourg OJ edition

14. Administrative cooperation in the field of taxation - Mutual assistance for the recovery of claims relating to taxes, duties and other measures - Reverse charge mechanism: goods and services susceptible to fraud - Promoting Good Governance in Tax Matters (debate)
Video of the speeches
PV
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  President. – The next item is the joint debate on the four reports dealing with taxation.

We have here:

– the report by Mrs Alvarez on administrative cooperation in the field of taxation (A7-0006/2010),

– the report by Mr Dumitru Stolojan on mutual assistance for the recovery of claims relating to taxes, duties and other measures (A7-0002/2010),

– the report by Mr Casa on an optional and temporary application of the reverse charge mechanism in relation to supplies of certain goods (A7-0008/2010),

– the report by Mr Domenici on promoting good governance in tax matters (A7-0007/2010),

I will give the floor to Mrs Alvarez, the rapporteur, for four minutes.

 
  
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  Magdalena Álvarez, rapporteur.(ES) Mr President, ladies and gentlemen, the European Union is founded on a relationship of solidarity between its Member States. Indeed, a good example of this solidarity is administrative cooperation on tax matters, which is a key element of the functioning of the Union. This is all about loyalty between Member States and their tax administrations. Such loyalty translates into trust, whereby partners trust each other, coming to see themselves as allies who will not allow fraudsters to find refuge in their territory and continue their fraudulent activities there.

Tax fraud tarnishes the entire economy, and has serious implications for national budgets, as it reduces capacity to incur expenditure and undertake investment. In addition, the principle of tax equity is infringed, as regards those citizens who do abide by the rules. Unfair competition occurs, leading to inadequate functioning of the market. All these implications are particularly worrying because the latest estimates suggest that tax fraud in the European Union amounts to EUR 200 billion a year. If we consider that this figure equates to twice the cost of the Commission’s proposed economic recovery plan, the size of the sum involved can be appreciated.

We are therefore facing a major challenge and should come up with a decisive response. The directive currently in force certainly represented a first step along the way. Unfortunately, and despite all the good intentions enshrined in that directive, its practical implementation has not produced the desired results.

It is now time to go a step further and equip ourselves with new instruments so that issues in the field of taxation are dealt with alongside market integration and liberalisation. I therefore welcome the proposal tabled by Commissioner Kovács and I would like to congratulate him on his work throughout his entire mandate, and today, in particular, on this proposed new directive.

The proposal will equip us with more and more efficient means with which to combat tax fraud and tax evasion in Europe. The new directive represents a qualitative and quantitative leap forward in this respect. It is a quantitative step forward because it sets new obligations and a qualitative step forward because it extends and specifies the existing obligations. The field of application is extended by moving from exchange of information upon request to automatic exchange.

The third new element is the lifting of banking secrecy. As I see it, this is the most notable measure in the proposal, in that the practice of banking secrecy is the main barrier facing tax administrations. The OECD has long called for the lifting of banking secrecy, and the G20 has now taken up this cause. The implementation of this will provide a very efficient tool to put an end to the untenable existence of tax havens within the EU.

This aim is shared by the report before us today. In this report, we actually aim to strengthen the results of the Commission’s proposals. The idea is to improve the efficiency and the area of application of the new directive.

I do not intend to provide an exhaustive commentary, and will focus on the main amendments. Firstly, the area of application is extended, the implementation of automatic information exchange is strengthened, and regarding banking secrecy, it is proposed extending the applicability criterion to bring it into line with the rest of the directive. There are also compromise amendments, namely those relating to automatic information exchange, data protection and confidentiality, and to the exchange of information with third countries.

Finally, I should like to thank my fellow committee Members for their work and their willingness to cooperate. They are to be congratulated on their attitude. We have achieved a broad degree of consensus. The House is sending out a clear message. Parliament is firmly committed to combating tax fraud and tax evasion and to strengthening the great EU principles of loyalty, transparency and fair competition.

 
  
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  Theodor Dumitru Stolojan, rapporteur.(RO) The recent financial and economic crisis has fully highlighted the major importance of having sound, sustainable public finances in each Member State. Member States which have good control of their public finances and counter-cyclical fiscal policies have been able to provide financial incentives to help their economies exit the crisis.

In this context, as rapporteur, I welcome the European Commission’s initiative and the Council’s draft directive on improving mutual assistance between Member States for the recovery of claims relating to taxes and duties. This directive will not only help boost efficiency in this area relating to the recovery of claims, but will also help the single market operate better. I would like to mention to you that the draft directive contains major improvements to a number of important aspects with regard to the recovery of claims: the exchange of information between authorities, methods for pursuing claims and the feedback required by the European Commission to monitor a constantly growing activity, as reflected by the number of cases between Member States.

Amendments have been drafted. I would like to thank all fellow Members who have submitted these amendments, which have specified more clearly the directives’ terms of application.

 
  
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  David Casa, rapporteur.(MT) I believe that this report will clearly illustrate the efficiency with which the European Union operates, by virtue of its institutions, when faced with a problem that requires urgent and specific attention.

I believe that when we talk of missing trader intra-Community fraud, attention must be paid to the measures that need to be taken in this temporary scheme that is intended to stop those abusing the VAT systems used in Europe. This type of fraud, as I have already mentioned, is known as missing trader intra-Community fraud. In its most serious form, it is known as ‘carousel fraud’ which is a criminal activity carried out by expert and professional fraudsters.

Recent studies have shown that this type of fraud amounts to about 24% of all types of VAT-related fraud. It occurs when a person offering a service or selling a good receives VAT payment from an intra-community buyer and this payment literally vanishes without due payment to the treasury by these fraudsters and by these criminals.

It has therefore been dubbed ‘carousel fraud’ because this VAT goes on disappearing from each country where this type of trade is carried out. The Commission’s proposal thus provides the opportunity to eliminate this risk that is being taken when intra-community trade takes place. We have to ensure that we do not add to the bureaucratic burden and make the honest businessman suffer the consequences. We were also careful not to apply this temporary measure to a wide range of products but to apply it only to those that can be controlled and evaluated.

The Emissions Trading Scheme should be mentioned as it has been amended by means of this Commission proposal. We are stating that due to the vulnerability of the Emissions Trading Scheme, another change that has been implemented stipulates that when a Member State decides it is ready to adopt this system, then the reverse charge procedure has to be made mandatory for all payments concerning greenhouse gas emissions because it is imperative to have coordination and immediate action between all Member States.

Presently, and up to 2012, around 90-95% of the credits are allocated to those who generate most emissions. These are issued by national governments and between 5 and 10% of these are auctioned off. From 2013 onwards, the greater part of these credits will be auctioned and therefore, before this system is put into place and is under way, we need to ensure that the market is being protected from those who are trying to abuse the system.

I believe that when one considers the consensus within the Economic and Monetary Affairs Committee, even with the compromises that I managed to reach – with the Socialists, the Liberals, and all the political groups – I believe that this should pave the way to a more reliable system. Thus, when my report is approved, we would be combating fraud seriously and will therefore be more successful in matters related to the VAT system within the European Union.

 
  
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  Leonardo Domenici, rapporteur. (IT) Mr President, ladies and gentlemen, although the theme of good tax governance has always been of great importance, it has become even more relevant and significant following the major economic and financial crisis of two years ago. European and international summits – the G20 – have discussed and continue to discuss it, particularly when they are concerned with fighting tax evasion and tax havens.

All this is important. It is a sign of commitment and willpower, but we should not delude ourselves into thinking that an announcement is all it is going to take. We need an effective and ongoing policy. There are still many problems to be dealt with. It really is still much too easy to buy or set up a front company in order to avoid taxation. Just look around on the Internet: there are thousands of websites offering companies for sale, even in European Union countries. Often, all you have to do is send an email and attach a photocopy of a scanned passport in order to set up a company. We must put a stop to the practice of creating fictitious legal entities to evade tax.

The report I am presenting is based on the European Commission communication of 28 April 2009 on Promoting Good Governance in Tax Matters. The report moves towards putting forward firm proposals, and calls for a strong commitment from the European Commission and Council, so that these proposals can be implemented. The fight against tax havens, tax evasion and illicit capital flight must be considered priorities of the European Union.

Hence the principle of good governance, based on transparency, exchange of information, cross-border cooperation, and fair tax competition. The point is that we need increasing tax cooperation and collaboration in the European Union.

The general objective that we must set ourselves is for automatic information exchange on a global and multilateral scale, but this must, obviously, start within the European Union. As Mrs Alvarez has already said, we must completely abolish bank secrecy in European Union countries and hasten to put an end to the temporary derogation that allows the application of a withholding tax, which is often evaded or underestimated, instead of an exchange of information.

I do not wish to dwell on the tangible proposals that the report contains. I will, however, stress that we still particularly need the following things: to extend the scope of the 2003 Savings Directive, to fight VAT fraud, to create an EU public register listing the names of individuals and undertakings having set up companies or accounts in tax havens and to give new impetus to tax harmonisation projects, beginning with the common corporate consolidated tax base.

The European Union must also send out only one message internationally, and fight for the improvement of OECD standards to achieve the automatic sharing of information, instead of sharing on request.

Mr Kovács, having listened to the other reports as well, we need strong commitment by the Commission and we now also need these priorities to be emphasised to the new Commission at the time of handover. As the European Parliament, we are entitled to call on the Council and the Commission to account for their work.

I thank my fellow Members, and especially the shadow rapporteurs, for the contribution they have made to this work, which I hope will be adopted by Parliament.

 
  
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  László Kovács, Member of the Commission. – Mr President, honourable Members, it is my pleasure to discuss tax matters with you today, the last day of my mandate as Commissioner responsible for taxation and customs.

I would like to express my thanks first of all to the European Parliament, and especially to the Committee on Economic and Monetary Affairs, for the support the Commission and I have received during the last five years for most, if not all, the tax proposals we presented.

The tax policy issues you are currently discussing have a major role in order to achieve the Commission’s objective to better tackle tax fraud and evasion which results in the loss of EUR 200 billion to EUR 250 billion a year at EU level. We are also aiming to increase transparency and cooperation.

I would like to express my special thanks to Mr Domenici, Mrs Alvarez, Mr Stolojan and Mr Casa for dealing with these tax initiatives in a constructive manner. I am very pleased that the essential message of the reports is one of support for the Commission’s initiatives. I understand that the reports encourage increased efforts concerning, firstly, good governance in tax matters, both in the European Union and beyond; secondly, administrative cooperation in the tax area; thirdly, mutual assistance in the recovery of tax claims; and, fourthly, the fight against VAT fraud, in particular, carousel fraud.

Concerning good governance in tax matters, the Commission’s policy is aimed at promoting the principles of transparency, the exchange of information and fair tax competition on a global scale. The Commission adopted the communication in April 2009, promoting these principles in order to combat cross-border tax fraud and evasion, both within the EU and beyond, and to achieve a level playing field.

The Commission has tabled several proposals in order to improve good governance within the EU. The debate is ongoing on these proposals, but I hope that they will be adopted soon and that it will reinforce our arguments vis-à-vis other jurisdictions to take similar steps.

The Commission strongly believes that the deepening of economic relations between the EU and its partner jurisdictions should always be accompanied by commitments to good governance principles. Based on the 2008 Council conclusions, the objective is to introduce in relevant agreements with third countries a provision on the basis of which EU partners would recognise and commit themselves to implement the principles of good governance in the tax area.

Particular attention needs to be paid to developing countries. The Commission services are currently preparing a Communication which would be dedicated to good governance in tax matters in the specific context of development cooperation. This communication will address what role good governance in tax matters can play in improving resources mobilisation in developing countries, notably through capacity building.

I welcome your support to fully associate the Commission in the works of the OECD Global Forum peer review exercise, in particular, with regard to the identification of non-cooperative jurisdictions, the development of a process for evaluating compliance and the implementation of measures to promote adherence to the standards. The European Commission should continue to be an active player to ensure that all partners live up to their commitments.

In relation to the number – which is 12 – of tax information exchange agreements for a country to conclude for achieving the status of a cooperating jurisdiction, the Commission supports the need to review it and to take qualitative aspects into account such as, firstly, the jurisdictions with which the agreements have been signed. To be explicitly clear, a tax haven which has 12 agreements with other tax havens would certainly not pass the threshold. Secondly, the willingness of a jurisdiction to continue to sign agreements even after it has reached this threshold and thirdly, the effectiveness of implementation.

As regards your request to examine a range of options for sanctions and incentives to promote good tax governance in tax matters, the Commission is already examining a range of incentives to promote good governance at EU level, for example, the enhanced use of development aid in order to encourage certain third countries to move away from unfair tax competition. Work on possible sanctions is less advanced and, of course, any EU action must take into account individual Member States’ tax policies.

There are, however, two specific areas where I do not entirely agree with you. One relates to the public registries and disclosure of information concerning investors in tax havens. I think a balance must be established between privacy and the need for jurisdictions to enforce their tax laws.

While there should be no restrictions on exchange on the basis of bank secrecy or domestic tax interest requirements, respect for taxpayers’ rights and strict confidentiality of information exchanged must apply. These limits have to be respected, so a public register may not be the best solution.

The other concern is transfer pricing. You propose shifting to the comparable profit methods in order to better identify inaccurate transaction prices and the most frequently applied tax-evasion techniques. In my view, while it is true that a comparison of industry sector profits may be an indicator that something is amiss, that single indicator alone is not sufficient to conclusively identify inappropriate transfer pricing and could only be one factor in a much wider risk assessment of the accuracy of prices charged on transactions between subsidiaries of a multinational company.

The comparative profit method is acceptable but only if it arrives at the same result as the transactional methods. Going straight to the comparative profit method – as the amendment seems to suggest – would not necessarily give us the ‘right’ arms-length answer.

The proposed new directive on administrative cooperation in the field of taxation seeks to enhance and streamline all mechanisms of exchange of information and other forms of cooperation between the Member States to better prevent tax fraud and tax evasion. In particular, the directive proposes to withdraw bank secrecy in the relations between Member States for administrative cooperation purposes. I warmly welcome the constructive attitude and support for this proposal shown in the report by Mrs Alvarez.

I am aware that the most controversial point of the discussion in the committees has been the amendments on automatic exchange of information aimed at rendering the use of automatic exchange optional only, based on a decision to be taken by the Member States.

Let me recall that the objective of this proposal is to enhance within the EU all types of exchange of information and other forms of administrative cooperation and specifically automatic exchange, which is a major pillar for preventing tax fraud and tax evasion.

Promoting the exchange of information on request, as an OECD standard, is certainly an acceptable approach with third countries but, in a fully integrated internal market as the EU single market is, Member States must be more ambitious and go further. They must be able to use the best instruments at their disposal to achieve their political objectives of fighting tax fraud and evasion.

I notice that the draft report on good tax governance highlights the necessity to develop the automatic exchange of information as a general rule, as a means of putting an end to the use of artificial legal persons to avoid taxation. I also notice that the report welcomes this proposal for a new directive for administrative cooperation as it also extends its scope to cover taxes of any kind and it abolishes bank secrecy. I therefore call on you not to vote in favour of the new amendment tabled by the PPE Group to erase any reference to automatic exchange of information in the report.

Concerning the amendments aimed at providing for more defined rules on the protection of private data, I would like to underline that in any case, Member States are compelled to respect the existing Community legislation on this subject and that therefore, these rules will have to be respected without any further amendment of the present draft directive. However, for the sake of clarity, I could envisage a general recital referring to the existing Community rules.

As regards the amendments on the evaluation system and requirements, I believe that the rules foreseen in the proposal and reinforced in the Presidency compromise text should provide for an adequate framework, reflecting the spirit of the proposed amendments.

The Commission can accept, in principle, certain amendments, such as those introducing the possibility of the Commission adopting delegated acts in respect of technical improvements to the categories of income and capital that are subject to the automatic exchange of information, while the categories concerned should be defined in the directive itself and not through comitology. This is also in line with the orientation of the ongoing Council discussions.

The Commission can also accept in principle the amendments on bank secrecy, which would not distinguish between taxpayers based on their tax residency. Furthermore, the Commission also accepts in principle the amendments on the presence and participation of officers in administrative inquiries.

The Commission will defend the spirit of these amendments in the Council deliberations, without formally amending its proposal, as these provisions seem to be already reflected in the compromise text.

Let me now turn to the Commission’s proposal on mutual assistance for the recovery of taxes. National provisions on tax recovery are limited in scope to national territories, and fraudsters have taken advantage of this to organise insolvencies in Member States where they have debts. Member States therefore increasingly request the assistance of other Member States to recover taxes, but existing provisions have only allowed 5% of debts to be recovered.

The Commission’s proposal is intended to provide for an improved assistance system, with rules that are easier to apply and provide for more flexible conditions for requesting assistance. As you know, ECOFIN reached an agreement on 19 January 2010 on a general approach to the draft directive. I very much welcome the supporting attitude to this proposal shown in the report by Mr Stolojan.

The Commission can accept, in principle, the amendment to make the exercise of inspection powers in the requested Member State by officials of the applicant Member State subject to an agreement between the Member States concerned. This is also reflected in the Council compromise text. However, the Commission cannot accept other amendments, such as introducing systematic and automatic exchange of information in the area of recovery, because it could lead to a disproportionate administrative burden, as it would also cover unproblematic recovery situations. Nevertheless, the Commission, in cooperation with the Member States, will examine the possibilities of how to further improve tax recovery assistance and address the eventual problems.

Let me finally conclude with a few words on the Commission’s proposal for an optional and temporary application of the reverse charge. In responding quickly to new and worrying fraud patterns reported by several Member States, the objective of this proposal is to give interested Member States the possibility, under an optional and temporary scheme, to apply the so-called reverse charge mechanism, under which it is the client who has to account for the VAT to a limited number of highly fraud-sensitive sectors. Under the proposed directive, Member States would be able to choose a maximum of two categories of particularly fraud-sensitive goods, such as mobile phones, and one category of services such as greenhouse gas emission allowances, on which major fraud circuits have been detected over the last summer out of a list of five categories.

They would need to assess the effectiveness of this measure, as well as its impact on a possible shift of fraud to other Member States, to other types of supplies and other fraud patterns.

I was pleased that the Council took up this proposal so quickly and reached agreement on it at the ECOFIN of 2 December. Of course, it is regrettable that an agreement could only be reached on one part of the proposal – on greenhouse gas emission allowances – but I am fully aware of the fact that this part was the one where the most urgent reaction was needed.

The Commission will continue to contribute to the Council negotiations on the remaining parts of the proposal as constructively as possible.

Finally, I would like to thank the European Parliament once again for its speedy reaction as well as for its clear support. Even though the Commission is not in the position now to formally accept all the proposed amendments, they will provide us with a useful input into the forthcoming Council debates. What is at stake is indeed our capacity to react quickly to a massive fraud mechanism, but also the credibility of the EU emission-trading system.

 
  
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  President. – Thank you, Commissioner Kovács. As you mentioned, this is the last occasion when you will be coming to this House so let me also thank you for the excellent cooperation we have had with you during your tenure.

 
  
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  Astrid Lulling, on behalf of the PPE Group.(FR) Mr President, chance often has a hand in things. At a time when we are debating the protection of privacy and of individuals, and when these debates are having new repercussions, the Members of this House have a wonderful opportunity to affirm some strong principles. Whether it is to do with the introduction of body scanners in airports or the SWIFT agreement with the United States, those who strenuously defend individual freedoms will not hesitate, this week, to make their voices heard, even if it means creating considerable diplomatic tension.

I regret, however, that their struggle for citizens’ freedoms is changeable and inconsistent. When it is an issue of protecting bank and financial data, the good suddenly turns into the evil. That which, in other fields, deserves protection, demands to be flouted in the name of a new imperative: the generally compulsory fiscal colonoscopy. Wholesale automatic exchange, which forms the basis of the Alvarez and Domenici reports, is the scanner that strips you at every turn; it is the SWIFT agreement writ large from which there is no return. However, this Parliament will not let a contradiction stop it. It can decide in favour of the automatic exchange of every conceivable type of data between tax authorities in Europe and, at the same time, reject the SWIFT agreement with the United States in the name of individual freedoms.

Can this incongruity, this inconsistency, be understood or even, at times, justified in the name of effectiveness? No. The golden rule, your golden rule, in other words, the automatic exchange of all fiscal, bank and financial data of all non-residents, will inevitably lead to a flood of unmanageable data. The precedent of taxation on savings should, however, serve as a warning to you. Yet that is not the case. Once again, you have to go down the wrong road and advocate a system that does not work. There is none so deaf as those who will not hear.

To those of my friends who seem to be worried about the bureaucratic excesses that the implementation of this structure might entail, I would like to say that the only solution is to oppose it, not to introduce it and then be surprised by its disastrous consequences.

Allow me, Mr President, to address a final word to Commissioner Kovács, who is fighting his last battle this evening. I wish him a happy retirement. Commissioner, in your career, you frequently chose the wrong fight but, kind soul that I am, I will not ultimately hold this against you too much. Have a happy retirement, Commissioner.

(The speaker agreed to take a blue card question under Rule 149(8))

 
  
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  Miguel Portas (GUE/NGL). (PT) Mrs Lulling, I would only like to ask you one question. In your speech, what has the automatic exchange of tax information got to do with ending secrecy when they are two clearly separate issues? The majority of countries in Europe do not have banking secrecy. Automatic mechanisms are in place for circulating information between tax authorities and the wealth of each one of them is not posted on the Internet. Is there no way to keep the two issues separate?

 
  
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  Astrid Lulling, on behalf of the PPE Group.(FR) Mr President, my fellow Member has unfortunately not understood a thing, but as I have no speaking time, I will explain it to him in private. I trust he will understand before the vote.

 
  
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  Liem Hoang Ngoc, on behalf of the S&D Group.(FR) Mr President, ladies and gentlemen, in this period of crisis, public finances have been heavily used, initially to save the financial system and then to cushion the social and economic impact.

In this context, there is much talk of public deficits, the spending of Member States is being attacked, but the fall in tax receipts is allowed to fade into the background. One forgets that, each year in the European Union, EUR 200 billion evades taxation, and these are resources which could have been used for essential recovery policies, resources which would allow us calmly to face up to what some are calling, in inverted commas, the demographic time bomb.

This is why the texts that we are discussing today are so important. The introduction of common tools and absolute transparency between the Member States in the area of debt recovery are vital steps if we are to ensure that no citizen, no company, can evade their fiscal responsibility, and that everyone contributes to the collective effort.

We must give the tax authorities of each country in the Union the resources to fulfil their missions. We must also emphasise the extent to which a healthy fiscal policy is essential.

Everyone is currently concerned about Greece. We are seeing today the extremes to which the lack of an effective fiscal apparatus leads. It is not merely the crisis that is harming the Karamanlis government; it is, above all, its predecessor’s lack of political courage in failing to reform Greece’s fiscal administration and thus to create an effective tax recovery tool.

We hope, in this matter, that the Union will use all of the resources at its disposal to confirm its solidarity with Greece. I hope that the vote we take on Wednesday confirms the vote in committee and results in some encouraging tax recovery texts.

 
  
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  Sharon Bowles, on behalf of the ALDE Group. – Mr President, I am glad that we are debating these reports within the Commissioner’s term, even if it is only just. The committee has worked hard to ensure that. Now, in many – in fact, I would say in most – things, we have had a mutually supportive dialogue, Commissioner, though of course we have not agreed on everything. For example, we agreed on VAT for intra-Community supplies but disagreed on joint and several liability in the framework of cross-border transactions, and in quite a few instances, we have both been disappointed by the slowness or lack of backing by Member States. CCCTB is one of those proposals.

But in the face of these disappointments, you have brought forward more intensive, traditional controls based on cooperation, information exchange and data access. So both personally, and as Chair of the Economic and Monetary Affairs Committee, I take this opportunity to thank you for your work and enthusiasm during your term of office. As colleagues have said, at this time of fiscal stress, enabling Member States to collect their full dues of taxes is even more important. With this driving force, the Council must be more progressive in future. Those who knowingly scheme to evade and avoid taxes do harm to society and should not expect leniency when they are caught, and we must have the tools to catch them.

Turning specifically to the matter of administrative cooperation, I believe that automatic exchange of information is beneficial. It goes along with the Savings Tax Directive, which I hope will soon be adopted in Council. But your activism in this matter has already created positive developments, both within and beyond the EU. I also commend the directive on mutual assistance for recovery of claims but consider a lower threshold for implementation more appropriate. And, finally, I apologise to you and colleagues for not staying for the rest of the debate but, as ever, there are double bookings going on in this House.

 
  
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  Philippe Lamberts, on behalf of the Verts/ALE Group.(FR) Mr President, ladies and gentlemen, for some weeks now, it has been fashionable to worry about the budget deficits of certain Member States. One can, of course, criticise some examples of public spending – and we shall not refrain from doing so – one might refer to the billions of euros in subsidies for fossil fuels, but let us not forget, as the Socialist Member said, that the increase in public deficits is the result, first and foremost, of the financial and economic crisis.

I do not believe that the governments need to be taught lessons in sound management by those who, due to their predilection for risky operations – financed, believe it or not, by debt – were the cause of the crisis.

This being the case, we agree that the public deficits are unsustainable at their current levels because they reduce the possibility of Europe spearheading the worldwide Green New Deal that it sorely needs. We must therefore confront the issue not just on the ‘spending’ front, but also on the ‘income’ front, and this is the spirit in which we are reading the reports tabled today, in particular, those by Mrs Alvarez and Mr Domenici.

By making the automatic exchange of information between tax authorities the norm, they give the Member States the means to tackle tax fraud seriously. I would remind you that the estimated annual amount of tax fraud is EUR 200-250 billion, or two per cent of GDP. Before we even talk about restructuring the European tax regime, let us ensure that tax due is collected.

Moreover, the draft supports the introduction of a common tax base for company taxation, which will clarify matters both for taxpayers and for the Member States. In so doing, it will be a step forward, but it should pave the way not for more competition but for more cooperation. It is time we put an end to fiscal dumping, to this road to ruin that is undermining the tax receipts of the Member States, and to the detriment of whom? Of the taxpayer and of SMEs, which do not have the resources of the big transnational companies to play the Member States off against each other.

The consolidated tax base is therefore, in our view, the prerequisite for the introduction − in line with what we are doing for VAT − of a progressive harmonisation of tax rates for companies, beginning with the setting of minimum thresholds.

Finally, establishing a sustainable basis for the Member States’ tax regimes will require much deeper changes: reducing the charges on income from employment and offsetting this reduction through the introduction of a progressive tax on energy – on non-renewable energy resources − and of a tax on financial transactions and profits. However, as my grandmother used to say, that is another story.

In the meantime, the Group of the Greens/European Free Alliance congratulates Mrs Alvarez and Mr Domenici on their excellent work, which has not merely repeated the past positions of the European Parliament, but has made them more ambitious and more practical.

I will finish by also saying a word of farewell to Mr Kovács. I was not here when you arrived. My colleagues have told me that the impression that you have given them through your actions is much better than the one you gave us when you were first appointed. You have therefore pleasantly surprised us. I wish you all the best.

 
  
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  Ashley Fox, on behalf of the ECR Group. – Mr President, I would like to thank the rapporteurs and other shadows for the hard work they have put into producing these reports.

Taxation, particularly any form of harmonisation, is always a sensitive issue. We need to balance the need to operate an efficient single market with the need to protect Member State competence on taxation. I would advise Mr Lamberts that the best way to minimise tax evasion is to have simpler taxes and lower tax rates. Tax competition is a jolly good thing. It protects the taxpayer from rapacious governments.

Member States must be free to sign bilateral agreements with third countries. The UK and the US readily share information because of their history of cooperation in fighting terrorism. If this information was to be shared across the EU, many third countries would refuse to sign similar agreements in the future. Cooperation would cease and national security would be put at risk.

I urge Members to approach these reports pragmatically. We need to ensure that we do not indulge in needless harmonisation which endangers national security.

 
  
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  Nikolaos Chountis, on behalf of the GUE/NGL Group.(EL) Mr President, without doubt, the reports in question make a positive effort towards creating a legislative framework in terms of administrative cooperation at European Union level in the field of direct and indirect taxation other than VAT and excise.

However, I must say that the reports, the proposals for directives and so forth touch on the problem of tax evasion and tax fraud.

However, there are two aspects of tax evasion which have stood out during the crisis. The first has to do with tax competition within Europe; the last thing this promotes is solidarity and economic and social cohesion between the Member States. We need to address and resolve this problem.

The second has to do with offshore companies. As we all know, these companies are tax evasion and money laundering vehicles. The Greek Government’s intention, for example, to simply levy a 10% tax on such transactions is scandalous.

This being so, and as numerous Members have stressed, in these times of economic crisis, with all the Member States facing financial problems, not to mention the fact that the way in which the European Central Bank and Stability Pact operate is inadequate and they are exacerbating rather than resolving the problem, we need common solutions to common problems, one of which is tax evasion.

We need to come down on tax evasion and tax fraud, so that governments have revenue at a time at which there is an urgent need for redistributive and development policies.

 
  
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  Godfrey Bloom, on behalf of the EFD Group. – Mr President, taxation as a concept has not really changed very much in the last 3 000 years, has it? The rich and the powerful stealing money from ordinary people to make their own lives more comfortable.

Where there has been a change in modern times is that now taxation is ‘for the benefit of the taxed’: that somehow we are being taxed pro bono.

In order to perpetuate this myth, we invent periodic scares to frighten people into submission. The latest of these scares is of course that, if we do not cough up green taxes, we will all boil to death – reminiscent of the medieval religions, is it not, which played the same game: pay up or burn in hell.

Tax harmonisation is a concept dreamed up by the modern political class to make sure that no government steals too little from its people: a sort of thieves’ cartel if you will.

May I suggest, if you really want tax harmonisation, that the Commission and the bureaucracy pay the same taxes as the electorate, that they bear the same burden of tax as the rest of us, before the electorate storm this building and hang us from the rafters, as they have every right to do.

 
  
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  Hans-Peter Martin (NI). (DE) Mr President, we need to overhaul the democratic process. As a young author and journalist, I used to pay 62% tax out of conviction, because I was convinced, and had the impression, that we were governed by good people. However, since becoming a Member of the European Parliament, I have seen what actually happens to tax revenue. Back then, we used to pay millions of schillings every year. What bothers me in this debate on the promotion of good governance in tax matters is the fact that we are not looking at our own spending, but simply talking about evil tax fraudsters.

Back then, when the tax rate was 62%, my tax adviser was Christoph Matznetter, who later became Austria’s Secretary of State for Finance. He told me: ‘you are from Vorarlberg, go across the border, to Liechtenstein or Switzerland!’ I did not do it, but others did. However, if, in the light of these experiences, you approach this with the sober and rational mind of someone who was not a civil servant, who was not an expense to the social security system, who was not active in any public domain, as the majority of Members here are, then you have to ask yourself how in all the world can I my save my hard-earned money from this wastefulness?

My suggestion therefore is as follows: let us begin at the point where we can demonstrate that a sensible administration will use money sensibly, that is, with ourselves. Why do we need another 200 new jobs? Why do we need to fund school skiing lessons this week? What is all that for? If you really want to take the fight against tax havens, the recovery of tax claims and the attraction of people to the project of the European Union seriously, then we have to begin with ourselves and show people that the institutions we stand for are spending the taxpayer’s money responsibly. Otherwise, we will continue to lose tax revenue, without any justification for calling those people to account.

 
  
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  Enikõ Gyõri (PPE).(HU) Ladies and gentlemen, a 4% GDP decline, 21 million unemployed EU citizens, deficit proceedings against 20 Member States, 80% State indebtedness. With the European Union in such a state, I ask: can we afford the luxury of allowing billions in taxes to just drain away? It is intolerable that while we sacrifice huge amounts on economic stimulus and on keeping workplaces open, there has been no progress at EU level for finding ways, for instance, to move the recovery of cross-border tax liabilities up from the shameful 5% level. Or whether we should extend the automatic exchange of information uniformly to all income, thereby eliminating the need for governments to get information from stolen data storage media about their citizens’ untaxed income invested here and there.

At the moment, the rate of tax fraud in the EU amounts to two and a half times the total EU budget. I strongly believe that Member States’ tax authorities must cooperate in order to track down tax fraud. Nobody should be able to hide behind bank secrecy, and let us abolish quasi-tax havens inside the European Union, even when, my fellow Members, it hurts the Member States concerned. The interest of Europe as a whole must take precedence over partial viewpoints. Honest taxpaying citizens of the EU expect no less from us than rules that are binding for everybody, without back doors.

The Domenici report gives an account of how to close those back doors. Our topic now is not tax harmonisation but how to recover taxes levied according to each Member State’s rules, with the help of others, if need be. All other elements of the tax package before us serve this same purpose. On behalf of the EPP, I have added several suggestions to the Domenici report which had the support of other political groups as well. In the first place, I suggested setting up a system of incentives that would guarantee that the Member State acting on behalf of the one seeking recovery of cross-border taxes would receive a portion of the recovered sums. This way, we could give a push to the halting cooperation between tax departments. Secondly, by using a system of comparative profits, we could take effective action, especially against multinational companies that manipulate transfer prices in order to evade taxes. I know that Commissioner Kovács has doubts about this, but I think work could begin in that direction.

Finally, I am glad the Commission supports the need for tightening the requirements for tax information exchange as stipulated by the OECD model agreement applicable to 12 States. I think that by continuing on these paths, we can move towards a more honest tax policy.

 
  
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  Olle Ludvigsson (S&D). (SV) Mr President, this evening, we are debating a number of measures to combat tax fraud and tax avoidance of various kinds. These are matters of great importance. It would be a very good thing if we in the EU were able to strengthen our instruments and our cooperation for combating tax evasion in the manner proposed.

The economic and financial crisis has hastened the need to make our tax systems as effective, reliable and fair as possible. I take a positive view of the proposal to extend the application of the reverse charge mechanism. Among other things, this is a crucial step in the development of our climate change work. When emissions rights start being auctioned in 2013, we need to have a credible trading system in place that is not plagued by VAT fraud and similar problems. The reverse charge mechanism is likely to be an excellent way of preventing such VAT fraud. It will ensure both the credibility and the effectiveness of the system.

The work on the report on the reverse charge mechanism has been very constructive. I am pleased to see that the Commission, the Council and my fellow Members concerned were determined to come up with a good solution quickly. A central element of the report is the creation of a comprehensive assessment system – a system that is based on uniform criteria. It is very important that we monitor carefully how well this reverse charge mechanism works in practice in the area concerned. The measures to combat tax evasion now being proposed are an important step along the way, but should be regarded as a small part of a more extensive, long-term process.

There remains much to do in this area. EU cooperation should be reinforced and the EU should lead the way in creating effective international agreements to combat tax evasion.

 
  
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  Sylvie Goulard (ALDE).(FR) Mr President, this seemingly rather technical package in reality relates to some highly political issues. First, administrative cooperation between States on fiscal matters is a key question for the internal market. I believe that it is important to stress this, because the free movement of persons and capital constitutes one of the precious European Union acquis to which we are so attached. However, it must not result in an unjust taxation situation in which some well-advised and mobile citizens evade their fiscal obligations, whilst the more sedentary citizens remain subject to them.

Nor should it act as an incentive for competition between States, by which I mean an incentive for fraud or evasion. This explains our position in favour of a consolidated tax base for taxation on companies and the automatic exchange of data between Member States, which has already been discussed.

If Mrs Lulling had done us the honour of staying with us, I could have told her that the question of civil liberties does indeed arise when we are talking about the exchange of sensitive data, but that, in my view, there is a major difference between the data that we can exchange between Member States of the European Union – in other words in the framework of the internal market, and in the service of the internal market – and the data that we exchange with other countries, even friendly countries such as the United States.

The second, highly political issue, especially after the crisis, is the fight against tax havens, but also against grey areas – or indulgent practices – which unfortunately still exist within the European Union or in associated territories. Following the G20 declarations, the citizens are expecting results and a credible Union. This has been the thrust of many amendments, and I believe that this Parliament must attach renewed importance to the issue.

Finally, to conclude, I would like to say a word to Mr Kovács – it is quite rare to be able to say goodbye to someone on the very evening that their mandate is ending – and, above all, to give a piece of advice to the Commissioner-designate, Mr Šemeta, whose initial steps in this area we have welcomed, just as we have welcomed the initial steps of the Barroso II Commission, which seems determined to tackle the issue, especially by entrusting Mr Monti with the task of drafting a report on the internal market containing all of these aspects.

I believe that, however resistant and reluctant the Member States may be, it is up to the Commission to do as you have been able to do, Mr Kovács, and use its power of initiative, but perhaps to a greater extent. The Member States’ coffers are empty. Taxation is another way of filling them and, provided that this is done intelligently, we are in favour.

 
  
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  Eva Joly (Verts/ALE).(FR) Mr President, Commissioner, ladies and gentlemen, thanks to Mr Domenici’s efforts, the report on which we have to take a final vote this week is a high quality document. I sincerely hope that it will be adopted on Wednesday at our plenary sitting. Many of the advances that it contains on the issues of financial transparency, fiscal policy and the fight against tax havens, the major consequences of which are rightly stressed here, are simply without precedent.

First, we should welcome the fact that the text acknowledges the considerable limits of the fight against tax havens as it has been carried out until now. Tax treaties and the OECD lists of non-cooperative jurisdictions, to reproduce the terms officially in use, are unsatisfactory and even represent part of the problem that they are meant to be solving.

That is why the proposals in this report, which aim to go beyond this approach, to adopt a new definition of tax havens and to introduce new tools – including sanctions − to help in this fight are hugely important. This is obviously the case for the proposal to introduce automatic exchange of tax information, both within the European Union and at international level.

It is also the case for country-by-country accounting, which the report is demanding and which will make it possible to measure the real activities of companies in the countries in which they are established and to verify that they do indeed pay the taxes which they legitimately owe there. These are two fundamental demands which have long been supported by many experts. We can only welcome the fact that the European Parliament is adopting them and, in so doing, will become one of the institutions that is most involved in this fight.

Ladies and gentlemen, the problem of tax havens is not a mere technical issue. It relates to fundamental choices. Do we wish to give developing countries the means to benefit from their own resources instead of seeing these confiscated? Do we wish to ensure that all of our companies and our fellow citizens contribute within their means to the financing of civic life? By voting for Mr Domenici’s report, we will be giving a positive answer to these two questions. An answer of which, I believe, we can only be proud.

On a personal level, I would like to thank Mr Kovács for the seminar that we jointly organised in Brussels on 9 December to put this subject on the agenda. Thank you and good luck.

 
  
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  Ivo Strejček (ECR). (CS) Mr President, Commissioner, today we are debating a package of economically and politically contentious proposals that are supposed to bring about significantly improved cooperation in the field of taxation. Tax fraud is undoubtedly a major problem which reduces State budget revenues. However, what are the causes of tax evasion and what are the motives of those who resort to tax fraud?

Firstly, high rates of tax. The higher taxes are, the more taxpayers will look for ways to circumvent their tax obligations. We should bear this well-known economic truth in mind particularly today, when most politicians assume that public finance deficits will be resolved through higher taxes, in other words, on the revenue side of the budget rather than through major cuts in spending. I would like to make one more remark, which is that tax havens exist for this very reason, because people move their capital to locations with lower taxes. If you want to shut down or limit the existence of tax havens, you must cut taxes.

The second important reason for tax evasion is the opacity and complexity of tax systems. The more exemptions, the more fraud. Statistical data and various studies confirm that the complications of, for example, VAT collection, are caused primarily by confusing explanations and the thousands of widely-varying exemptions. Unfortunately, neither the Commission nor MEPs are suggesting that Member States embark on tax cuts or fundamental corrections that might bring about transparency in tax jurisdictions.

The contentious proposals are as follows: the introduction of the principle that there is an obligation to share information on taxpayers; secondly, the mandatory information on taxpayers is precisely defined and is clearly highly sensitive; thirdly, the obligation to share information on all types of tax is being applied for the first time and fourthly – a legislative novelty – banking secrecy is breached.

 
  
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  Miguel Portas (GUE/NGL). (PT) Mr President, this debate is very important because what governments and the Commission itself have said to us is that in the years ahead, the crisis exit strategy depends on plans for radical cuts in public investment and social spending. And what the constant information from the various reports that have been discussed today tells us is that there is ultimately another way forward, a better way forward, a way forward that will encourage honesty and satisfaction among taxpayers!

And this way forward is also the way forward in overcoming the crisis from a revenue point of view – mainly from a revenue point of view – as it will put an end to the nightmare that has been caused by tax havens and to the nightmare that has been caused by widespread tax evasion and tax fraud among large companies and the banking system.

And this is exactly why I very much agree with Mr Domenici’s report when it says that not enough is being done to put an end to bank secrecy. And this is exactly how we must proceed because it is true that a little justice in the economy never did anybody any harm.

 
  
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  Arturs Krišjānis Kariņš (PPE).(LV) Mr President, Commissioner, the question is not: are we for or against combating tax fraud. Of course we are in favour. The question is rather, what means do we wish to employ in order to achieve this objective. The situation among Member States at present is that there are States that do not willingly exchange information on taxpayers with other Member States, even when requested to do so. The proposal under discussion concerns the introduction of an automatic system, in which all information on nationals and businesses residing abroad will be exchanged between tax authorities. To my mind, what is important is not to increase bureaucracy, whichever way we exchange information. Right now, the European Union is in crisis – in Spain, unemployment is nearly 20%, in Latvia it is over 20%, in many other countries, it is well over 10%. Unfortunately, this is an upward trend. As a result, Member States are being forced to reduce government spending, something that is actually directly opposed to increasing the size of the bureaucratic machine. We cannot afford to increase the size of the bureaucratic machine. However, introducing this system of automatic information exchange would inevitably involve increasing the size of the bureaucratic machine. In my opinion, European taxpayers simply cannot afford to sustain this at this time. There is, to my mind, another proposal that we should discuss, namely, perhaps not to go to extremes, i.e. to exchange all information automatically, but instead to ensure at least that all Member States exchange all information upon request. To sum up, then, an automatic exchange of information upon request. Thank you.

 
  
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  Arlene McCarthy (S&D). – Mr President, with over EUR 200 billion lost annually, combating tax fraud and tax evasion in the EU must continue to be a priority for this Parliament, the European Commission and the Member State governments. I cannot believe that anyone in this House believes that a right to privacy is a right to evade tax.

There is, of course, a global consensus that a lack of good governance in tax matters encourages tax fraud and tax evasion. Tax fraud has a major impact on national budgets. It robs public services, health, education and research of vital resources. Moreover, according to a major charity, tax evasion by the super-rich and by global corporations has a severe impact on the lives of more than five million children in the developing world.

Governments in the poorest developing countries are being swindled out of EUR 92 billion a year in tax revenues, while the World Bank estimates that just a third of that – EUR 30 billion to EUR 34 billion – would pay for the UN’s Millennium Development Goals. More shockingly still, a UK charity, Christian Aid, maintains that around EUR 7 trillion is hidden away in tax havens.

Therefore, the actions and recommendations proposed in these reports are essential to supporting a level playing field and to tackling the distortions and abuses which underpin those systems of tax evasion and fraud. Assets held offshore are now equal to a third of global assets…

(The President asked the speaker to speak more slowly for the sake of the interpreters)

…half of the world’s trade passes through tax havens, and action to crack down is already being stepped up. Tax havens are under investigation, with proposals in the EU and in the OECD being taken forward.

Stronger tax cooperation is the only way forward. This does not weaken national sovereignty but, on the contrary, strengthens and enhances national tax systems, stopping those who seek to undermine the integrity and functioning of those systems.

If we have learned one lesson from the global financial crisis, it is that we need more openness and transparency on financial transactions. That is why I support the proposals to move towards a global agreement and standard on automatic exchange of tax information tabled by our rapporteurs.

I would like to finish by saying that those who seek to water down these proposals, hiding behind scaremongering on data privacy, are neither serious nor ambitious in supporting global action to tackle the scourge of tax evasion and to promote good governance, good citizenship and social responsibility.

 
  
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  Wolf Klinz (ALDE).(DE) Mr President, ladies and gentlemen, VAT fraud is not a mere peccadillo. It is a criminal act and a problem which either escalates or diminishes over time. According to the latest estimates, citizens, and thereby taxpayers, lose up to EUR 100 billion every year, perhaps even more.

At a time of accelerating public debt and crisis, citizens have no sympathy for the fact that the European Union has so far not been able to tackle this problem successfully. This is why I welcome a fresh attempt to introduce the reverse charge procedure, on which we will be taking a vote the day after tomorrow. What we are trying to do with the reverse charge procedure is effectively eliminate the problem of VAT evasion or at least reduce it. We have to wait and see, however, whether or not this procedure will generate the desired increase in VAT receipts and deter new cases of fraud. However, it is certainly worth the attempt. We will monitor closely the results of the procedure, the application of which is currently limited to 2014, and carry out a critical assessment.

However, I would have liked an amendment to one specific point: I am in favour of enterprises which duly discharge their duty of care in the context of a review of their VAT registration numbers, being exempted from any liability, even if the recipient commits fraud. I explicitly regret that my amendment to that effect did not command a majority in the Committee on Economic and Monetary Affairs.

 
  
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  Vicky Ford (ECR). – Mr President, tax fraud is a crime that not only robs governments, but also robs every single taxpayer – every single citizen who does pay their tax on time. There has been much good work by the OECD, the G20 and indeed the various rapporteurs in Parliament on the work to help combat tax fraud. I would like to speak specifically on Mr Domenici’s report and to thank him for the great transparency that he has shown in working together across Parliament to improve this document. However, I do have three concerns.

The first one is that combating tax fraud should not be used as a back door excuse for those who want to open up the debate on tax harmonisation across the EU. There is wording in the document about the common consolidated corporate tax base, and I think we should wait until the Commission comes to us later on this year with their impact assessment before jumping to a conclusion on any of the pros and cons of that debate.

The second point is on the controversial matter of exchange of information. It is very clear that in certain circumstances, better exchange is needed, and indeed, like the savings tax, the automatic exchange does have benefits. This document goes much wider and demands automatic exchange in all areas. I would rather we looked at each specific circumstance to see where we need it.

Thirdly, the Domenici report suggests an EU-wide levy on financial movements to and from certain jurisdictions. There are different sanctions and different incentives, as the Commissioner has pointed out, that could be used to promote good behaviour in this area. I am very concerned that we could be going back with just one suggestion which could be hugely controversial by having these words about an EU-level levy.

 
  
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  Diogo Feio (PPE). (PT) Mr President, in addressing these four reports, which appear to have a very prominent technical structure, we are debating weighty political issues. Firstly, and to make things clear: the fight against tax fraud and tax evasion should be ongoing. This is for reasons of respect towards those who pay tax and abide by the rules.

I also want to make it clear here that this is not a matter specifically related to any crisis. This is a matter of public ethics. And just as this matter should be debated, another matter relating to tax competitiveness should also be debated by the European Union and the Member States, with a view to encouraging economic growth through taxation policies.

It is also necessary to view the fight against tax fraud and tax evasion in a legislative light. Laws must be straightforward. Laws must be transparent and administrative bodies must also act in an appropriate manner. This is exactly why the issue surrounding the exchange of information is relevant, where we must consider the decisions that have been made by international organisations that have really studied this matter such as, first and foremost, the OECD. Exchanging experiences is essential in this respect, so that measures that sound good in theory are not counterproductive in practice.

Specifically on the subject of tax havens, we must support the decisions and progress made at the G20 and, above all, we must remember that the measures in this area should be suitable, proportional and effective.

 
  
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  Elisa Ferreira (S&D).(PT) Mr President, Commissioner, here are some facts that are worth remembering: according to the OECD, assets amounting to EUR 5 to 7 trillion were stashed away in tax havens in 2008. In the European Union, tax evasion, already mentioned today, amounts to between 2% and 2.5% of EU wealth, which is to say double the EU budget.

Nowadays there is also no doubt that tax havens, the vagueness of new financial products, the lack of administrative cooperation, the failure of regulation and supervision in the markets and the excessive ambitions of operators have all contributed to the terrible crisis we are experiencing.

On a global level, progress is being made and we are learning lessons from this – lessons that were established in the initiatives of the International Monetary Fund, the OECD, the G20, and the Financial Stability Forum. The European Union, particularly under the guidance of Mr Kovács, who I would like to congratulate, has been involved in a series of initiatives. These include administrative cooperation, the Savings Tax Directive, debt recovery assistance, a code of conduct, as well as increased cooperation by Belgium, Austria, Luxembourg, the Isle of Man and even neighbouring countries: Switzerland, Monaco and Liechtenstein.

However, it is important that this collective effort does not lead to what was so well described by Mr Domenici’s fellow countryman, when it is said in Leopardo that many things must change if everything is to stay the same. This is an example of what cannot happen!

European citizens are now suffering from unemployment, threats of tax increases and the loss of basic retirement rights. Small and medium-sized enterprises are not getting credit and sacrifices are widespread. These citizens are the ones who expect us – as their representatives here in Parliament – to learn the lessons and truly guarantee competition, justice, transparency and honesty within the European Union.

These four reports, particularly those of Mr Domenici and Mrs Alvarez, are along these lines. I hope that these reports receive widespread support from the Members of this House and, in fact, that they provide the European Union with the political drive it needs to learn the right lessons and also encourage these lessons to be recognised on an international scale.

 
  
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  Olle Schmidt (ALDE). (SV) Mr President, we are all aware that taxes are a sensitive issue, as we have heard. Member States quite rightly see taxes as being primarily a national matter; in the wake of the financial crisis, however, more and more countries are realising that cooperation within the EU must improve.

Tax competition is a good thing. However, the rules must be fair and no Member State must benefit from its rules being used to dodge taxes. Tax fraud is illegal, immoral and distorts the situation in individual EU Member States.

We may criticise the tax burden in our own countries. I have been known to do so myself. However, we must work to change the policy in our country rather than shirking our responsibilities. The most effective way to exchange information is to do so automatically. The EU has often been critical of tax havens of various kinds. It is therefore important that we show that we are also working internally to improve transparency, openness and cooperation in the area of taxation, while respecting the sanctity of private life.

In order to avoid unnecessary administrative expense and to create a clearer legal basis, the Group of the Alliance of Liberals and Democrats for Europe has submitted an amendment to the effect that the Member States must not be forced to assist another Member State if the matter concerns less than EUR 1 500 per year. I believe that this sets clear limits on the authorities’ powers and, as I understand it, Mr Kovács accepts this amendment.

Finally, I would like to thank Mr Kovács, Commissioner for 18 hours more, or whatever. It has been a privilege to cooperate with you. You did not achieve it all, but you did your best. Thank you and good luck.

 
  
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  Jacek Włosowicz (ECR).(PL) Mr President, in its sixth term, the European Commission adopted a series of legislative proposals as part of the fight against tax fraud and tax avoidance in the European Union. A key factor here is the proposal for a directive on administrative cooperation in the field of taxation. Thanks to its adoption by practically all Member States, the directive which is currently in force was, undoubtedly, the first step in the direction of administrative cooperation in this field, although it was evident that specific results were lacking in terms of its implementation. However, in this proposal, we have a strengthening of the internal sovereignty of individual Member States in the field of taxation by the application of more specific and effective management of tax receipts by each country, and also an intensification of the process of European integration, which is becoming increasingly necessary in the field of taxation, both from the political and economic as well as the administrative point of view.

 
  
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  Thomas Mann (PPE). (DE) Mr President, thank you Commissioner Kovács for your excellent work. Administrative cooperation between EU Member States in tax matters, which is my remit, is an ambitious project. It is necessary because tax evasion is no mere peccadillo. It affects countries across borders.

We have to work together to fight tax fraud and dubious tax havens. The view of the Member States that not everything can be solved at European level is a blatant error. Exploring the possibility of purchasing illicitly acquired data on fraudsters, which is legally problematic and an issue which we in Germany have been grappling with, should not be our only course of action. It may well be though that such purchase is necessary.

In this directive, I welcome, firstly, the planned automatic exchange of information between tax authorities; secondly, the enhanced procedure for the mutual exchange of staff between administrations; and thirdly, the urgently needed measure to relax bank secrecy laws far beyond the EU.

Admittedly, we need to remove some obstacles, particularly the clash between data exchange, on the one hand, and data protection, on the other. We need to strike a balance between the two and not allow one interest to prevail over the other.

Furthermore, cross-border dual taxation should be a subject of greater focus. I have spoken to a series of small and medium-sized enterprises operating simultaneously in different Member States. They say that the situation is far too complicated and that there is not enough transparency and experience, which is why they find themselves unable to take the right investment decisions. We have to consider that. We also need to reduce red tape and pay greater attention to what is actually necessary, so that tax administrations can help us work more closely together and simplify our procedures. If we can achieve that, if we can embed such simplified procedures into the everyday lives of businessmen, we will be making clear progress. This directive is an essential statement of our intention to do that.

 
  
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  George Sabin Cutaş (S&D).(RO) Our debate on the subject of the proposed taxation reforms is taking place in a situation which is inevitably making an impression on fiscal policies. The economic and financial crisis is causing the rise in deficits worldwide which, in turn, increases the importance of the resources assigned to the public budget.

As has already been said, the latest reports on this subject highlight the alarming magnitude of tax fraud in the European Union, amounting to more than EUR 200 billion annually, equivalent to 2-2.5% of GDP.

Our fellow Members who have worked on these reports, to whom I would like to express my appreciation for their efforts, have presented us with a glaring picture of the extent of the fraud. The economic recovery plan proposed by the European Commission aimed at reducing the crisis’s impact requires costs amounting in total to 1% of GDP. I believe that the situation requires strong anti-fraud measures and closer cooperation in tax matters between Member States, all the more so as the crisis has highlighted more than ever the negative aspect of the interdependencies between national economies.

Against this background, the proposal for a directive marks a step forward as it will bring European tax legislation into line with both economic developments and the strengthening of the European integration process. In this sense, the automatic exchange of information, the lifting of banking secrecy and measures to improve mutual assistance in recovering claims may contribute significantly to making administrative cooperation between the 27 Member States more efficient.

Finally, I would like to wish Commissioner Kovács every success in his future endeavours.

 
  
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  Carl Haglund (ALDE).(SV) (initially without a microphone) … the present directive is very welcome at a time like this when tax revenues around the world are diminishing. In a common market, there is no way we can accept the present situation in which taxable income can be concealed and remain untaxed in another Member State. As has been mentioned, the EU’s Member States are losing out on billions of euros of tax revenue every year because of failures in the exchange of information between the Member States. I would also remind you that so long as some people are hiding their income and thus avoiding paying taxes, the rest of us have to pay more tax to make up for it. That can hardly have been the intention – at least, not in my view.

It is astonishing that some people are defending the prevailing system, which actually allows people to avoid paying their taxes. I realise that some Member States have a lot to lose, but are they actually presenting a credible argument? No, they are not.

We should promote international cooperation on tax and draw up common standards to prevent tax fraud, both at EU level and globally. At the same time, I would remind you that there are those who believe that the protection of privacy is important and must be adequately safeguarded. It is important to bear that in mind, since the system we are in the process of creating will otherwise lack credibility in the eyes of our citizens, and that is essential if we are to succeed.

 
  
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  Sirpa Pietikäinen (PPE). – Mr President, I think it has been painfully clear in this economic crisis that we either fail separately in the EU or we succeed together. It has been a very long process to get to the point where we might really have proper automatic exchange of information concerning taxation issues in the EU and full transparency, with effective administrative cooperation between the officials and nation states.

While we are asking the private sector – the banks – to be more transparent and more reliable after the financial crisis, I really do think that we need to urge it of our nation states and ourselves as well. I therefore welcome the steps that have been taken here, but there is a long way to go. I urge the Commission to be very ambitious and very strong concerning international cooperation in order to have an international agreement on tax havens and automatic exchange of information.

 
  
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  Seán Kelly (PPE). – Mr President, taxation is absolutely vital for the running of countries – I think most citizens would agree with that. Nevertheless, many citizens do not welcome the paying of taxes with open arms and with a smile. This goes back to the time of our Lord, when he pointed out that one of the most despised species in his time was the tax collector, who was seen as a villain.

I am not sure if their status has gone up a whole pile in the meantime. Now they are regarded as Revenue Commissioners, but they probably would not win any popularity contests.

Nevertheless, side by side with that is the fact that, historically, those who evaded tax were sometimes seen as almost heroes, outfoxing the government. Now, thankfully, that too is changing, but at the same time, taxation evasion is rife throughout the country and throughout the world. Even in my own country, in the 1980s and 1990s, the banks themselves were providing offshore addresses for people for the purpose of evading tax. When that was found out, then, of course, the individual had to pay.

Now, what we need to do in the future is to ensure that tax evasion is cut down. The OECD estimates that 2.5% of global GDP is lost through tax evasion. Cigarette smuggling is a case in point, where cigarettes have moved from low-tax to high-tax economies, causing terrible damage to health and, of course, also to finances.

At the same time, the EU is limited by what it can do, because the Lisbon Treaty does not give it great competences in the area of tax. That came up in the Lisbon Treaty in the guarantees given to Ireland.

For that reason, there can be no common consolidated corporate tax base, and the principle of fair tax competition must remain. So what we have to do is, by collaboration, cooperation, conviction and persuasion, try and get things moving ahead – but we cannot do it by compulsion.

 
  
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  Sari Essayah (PPE). (FI) Mr President, these proposals represent excellent efforts to facilitate the fight against tax fraud and improve cooperation between authorities.

We would do well to remember that taxation is never an end in itself, but is society’s tool for implementing politically agreed objectives, including the equalisation of income distribution, the taxation of harmful practices, and the creation of an economic basis for common welfare services. A good tax system relies on a fair and broad tax base and reasonable levels of taxation.

Tax evasion and tax fraud eat away at the tax base and honest citizens and companies are left to foot the bill for the taxes that fraudsters avoid paying. As we have heard here, gross domestic product is now at crisis point in different parts of Europe. Tax fraud and evasion result in poorer GDP results to the tune of around EUR 200 billion a year. We really cannot afford this.

I would like to make a few comments about the reports themselves. When ways to combat VAT fraud are being considered, the notions of cost benefit, legal certainty and the proportionality principle need to be borne in mind. These are highlighted very obviously in Mr Casa’s report. It is reasonable to focus, in particular, on goods and services that are susceptible to fraud in the fight against VAT fraud, and the reverse charge mechanism gives these Member States an opportunity to apply a reverse order arrangement, by way of derogation from the main principle of the VAT Directive.

Administrative cooperation is a way to supplement national legislations, but we need to remember that it will never replace them or result in their approximation.

Most controversial of all with respect to these directives has been the matter of information exchange. Effective information exchange between the customs and tax authorities in the Member States helps to combat abuse, and that is why I think that we should be promoting the exchange of tax records and not blocking it. In Finland, tax records are public knowledge and the country is one of the least corrupt in the world. This being the case, I cannot see how the automatic exchange of tax records might threaten to violate civil rights in the way some of my fellow Members seem to think it would.

 
  
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  Paul Rübig (PPE). (DE) Commissioner Kovács, Mr President, financial legislation is, of course, a national responsibility and excites the self-interest of Member States. Here in the European Union, however, we should be thinking of how we are going to sustain the internal market, in particular, the four freedoms, in the future.

One of the main problems which we have to tackle here is, of course, dual taxation. Small and medium-sized enterprises (SMEs), which cannot keep track of all the legislation in this area, have particular difficulty offering their services in other countries. The Commission should therefore come up with a proposal on how dual taxation should be managed, and it must be one which puts in place a straightforward and transparent taxation system for these enterprises because, ultimately, it is the credit rating of a company that determines whether it can survive in the market and whether it will stay solvent. I would also very much welcome a one-stop-shop for SMEs, so that they can have a specific point of contact and so that tax refunds can be paid out quickly, efficiently and transparently.

 
  
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  Silvia-Adriana Ţicău (S&D).(RO) I would like to mention the e-Government systems which have already been developed in different Member States to implement the following types of applications: payment of taxes via electronic means, as well as payment of VAT via electronic means, or initiatives such as e-Invoicing. We are talking about a new digital agenda for the next five years, which means that Member States need to use information technology to improve administrative cooperation in fiscal matters as well.

I believe that, at least as far as e-Invoicing is concerned, a high-level group was already created in 2008 which finalised a report and recommendations for the European Commission last November. Commissioner Tajani also made the commitment that during the subsequent period, he would come up with initiatives aimed at supporting e-Invoicing so that it would become widely adopted across all Member States. I would like to ask the Commission if and when it is going to come up with such a proposal.

 
  
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  Nick Griffin (NI). – Mr President, discussing tax cooperation during the current euro crisis is rearranging deck chairs on the Titanic.

The southern nations are known in English by the harsh acronym PIGS (Portugal, Italy, Greece, and Spain). However, those being crucified on the euro are not pigs but people, scourged by utopian one-size-fits-all dogma. Their economies will either die of a thousand cuts or be bailed out, to the ruin of taxpayers in Britain and elsewhere. There will be very little tax to cooperate over.

There are two ways out: either abolish the euro and return to the captive nations of this Strawberry Soviet their own currencies, or expel the ‘problem countries’ from the euro. That might be the PIGS. More justly, it would be Germany and her French collaborator, because running the euro according to German interests is the root of this shambles.

This endless crisis will destroy the federal project – tax cooperation and all. The tragedy is that it will grind so many innocent victims into poverty before it does so.

 
  
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  Elena Băsescu (PPE).(RO) I would like to congratulate Mr Stolojan for all his efforts in drafting the report on the recovery of claims. The EU needs common legislation, enforced uniformly in all Member States for combating tax fraud and evasion. The internal market and a Member State’s budget can be affected by non-payment of any kind of taxes or duties. The free movement of capital and persons has necessitated the extension of the legislation’s scope of application. Compulsory social security contributions will also be included from the start of this year.

One important step in the process of recovering claims within the EU is the rapid exchange of information. The existence of common standard instruments and forms, which will be translated into all the official EU languages, will facilitate the relevant authorities’ daily work. A common automated system will enable queries to be resolved more quickly and at a lower cost.

 
  
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  Udo Bullmann (S&D). (DE) Mr President, even as we today congratulate Mrs Alvarez, Mr Domenici and our other fellow members on their excellent reports, even as we congratulate Commissioner Kovács on his committed work and wish him all the best with his future work, and even as we express the hope that he will pass on to his successor the passion with which he has fought for a common tax policy, we must also then mention Member States, those Member States who continue to hesitate in taking action that is more than necessary in this crisis situation, action which will finally usher in better cooperation.

It is quite shocking that we still have not made any breakthrough on the question of the tax base. Anyone who thinks that they will be able to defend their sovereignty in this way will lose it, just as they will lose their tax revenue. Therefore, the main message of these reports is that we must forge better cooperation in Europe. Only that will lead to progress!

 
  
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  Michael Theurer (ALDE). (DE) Mr President, ladies and gentlemen, the fight against tax fraud is a necessity. Of course, tax evasion and tax fraud are not the causes of the economic and financial crisis. It seems important to me to make it clear once again in this House that we must regain the confidence of the taxpayer through simple tax systems and through low and fair taxes. However, that is not to say that we should not actively fight tax evasion and tax fraud, because any tax evasion undermines our sense of justice.

That also brings us to the subject of tax havens. Germany’s neighbour, Switzerland, has voiced concerns that it is being placed under pressure. On this point, I would like to ask the Commission specifically: are proposals being made, or rather, are measures being taken to place Switzerland under particular pressure? My personal view is that Switzerland cannot afford to treat the EU any less well than the USA. Therefore, that means that Switzerland must actually join in our concerted efforts to fight tax evasion.

 
  
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  László Kovács, Member of the Commission. – Mr President, honourable Members, I have found the debate interesting and inspiring. Like most of you, I am persuaded that our efforts to combat tax fraud and evasion and to increase tax cooperation are worthwhile. I am grateful for your support and for the work of the four rapporteurs, and I am very grateful for the support for these important Commission initiatives.

Promoting good governance in tax matters is a complicated dossier containing several different issues. Your reports have covered virtually all of them, from the formal legislative proposal promoting administrative cooperation to our work with third countries. I was pleased to hear that many of you encouraged the Commission to be more ambitious. I fully agree with you, and I am sure that, with your support and with that of the governments of the Member States, the new Commission will be able to tackle the challenges ahead. I know that these files remain a priority for my successor. The Commission, Parliament and the Council should continue efforts for the approval of the legislative proposals which are on the table or in the pipeline and the work of the Code of Conduct Group on business taxation.

On the external aspects of the principles of good governance in tax matters, all actions mentioned in the communication should be promoted, with special attention to those related to developing countries.

As regards the specific proposals on administrative cooperation, mutual assistance in the recovery of tax claims and the optional and temporary reapplication of the reverse charge mechanism, I also want to thank you for your comments and views. I am glad to see that the European Parliament and the Commission share views on the action to be undertaken to better combat tax fraud and evasion in the European Union and beyond. I also see general support for the three proposals.

Achieving rapid progress and unanimous agreement on the proposal on administrative cooperation is one of the priorities of the Spanish Presidency. It is also now a priority for most Member States. The EU urgently needs to reach a unanimous agreement internally to be able to show, on the international scene, its determination to move ahead from the OECD standard and the G20 recommendations and pave the way for a future evolution at international level by proving it is able to develop fully fledged administrative cooperation.

It is clear that there is no one single and global solution for eliminating tax fraud and evasion, but the proposals we have discussed today are important steps forward within the framework of the European Union’s anti-tax fraud strategy.

Finally, just one day before the end of the mandate, I would like to repeat my thanks for the support for the Commission’s tax and customs initiatives and, in particular, for the cooperation of the ECON and IMCO Committees.

 
  
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  Magdalena Álvarez, rapporteur.(ES) Mr President, I should like to refer to the reasons why we go beyond established OECD standards concerning automatic exchange of information.

Many arguments could be adduced in this regard, but clearly the OECD model relates to the broader framework of international relations in which the rules of the game are very different from those which apply in the European Union.

As Mr Kovács stated, there is a single economic area within the European Union in which tax information should enjoy the same freedom of movement as people, so that each Member State can apply its tax regime. What we have in the Union is a single market in which there are no barriers for goods or for people. There is therefore no reason to have barriers where tax information is concerned.

The Member States are part of a political project and the relationship between their tax administrations must be consistent with that political project. Political principles are at stake here, over and above issues of practical desirability.

I should also like to emphasise that national fiscal sovereignty is strengthened rather than weakened by combating fraud. In other words, the fiscal sovereignty of Member States will be strengthened as more effective instruments for the implementation of their own tax system become available to them. Thus, we should bear all this in mind and it is therefore incumbent on us to support this directive.

In addition, as Mr Klinz has rightly said, fraud is an offence. It cannot be justified by resorting to such feeble arguments as the high tax regimes in certain fiscal systems. On the contrary, I would go so far as to argue that if tax fraud were reduced, taxes could be lowered. We must certainly persevere in our efforts to simplify the various fiscal systems.

In conclusion, I should like to emphasise that the four reports and the four directives we are supporting have a strong deterrent effect, because when taxpayers realise that as a result of these provisions, fraudsters will have less room for manoeuvre and fewer safe havens available, the temptation to engage in such activity will be much less. Even if some individuals do attempt to engage in this activity, we shall have more effective instruments available with which to deal with them.

Finally, I must mention that these measures come at a most opportune moment, as the crisis has highlighted the dangers of a lack of transparency, transmission from certain countries to others, and the need for public stimuli. In this connection, I should like to refer to Mr Lamberts’ support. He has made it clear that in times such as these, public finances must make a special effort to adopt measures aimed at economic revival and social protection so as to mitigate the effects of the crisis.

For all these reasons, today’s citizens are more than ever aware of the seriousness of tax fraud and of its consequences for the economy in general. They are also eager for their representatives to take appropriate measures to deal with the matter.

 
  
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  Theodor Dumitru Stolojan, rapporteur.(RO) I have listened attentively to the views expressed by my fellow Members. I also noticed the abstentions on the automatic exchange of information. However, I firmly believe that we in this Chamber, at European institution level, must show every European citizen who honestly pays duties and taxes that we are determined to adopt every measure to keep tax evasion to a minimum so that the decisions on recovering claims for duties and taxes can be properly enforced, no matter which Member State the debtor resides in.

 
  
  

IN THE CHAIR: MRS WALLIS
Vice-President

 
  
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  David Casa, rapporteur.(MT) I, too, listened attentively to all that has been said and if I had to draw a conclusion from this important debate, it would be that we all agree that we must employ every means available to fight tax evasion and the different types of fraud that take place in various countries. We must accomplish this by means of measures such as those that have been proposed today, without harming the trade sector – particularly SMEs – and without increasing bureaucracy. On the contrary, I recommend that we must continue to reduce red tape in areas that frequently impede the trade sector.

We have to ensure that we do not penalise honest citizens who pay and do not evade tax. This also applies to those in the business sector, those who deal in cross border trade, and who do not evade taxes and therefore, who are not criminals.

Therefore, I believe that with these proposals, we will strengthen the credibility of the Emissions Trading Scheme and its related payments. At the same time, as I have pointed out, we need to reduce the administrative burden on honest businessmen and, moreover, we are ensuring that Parliament is kept informed throughout the whole adoption process of the reverse charge mechanism.

Like my fellow members, I believe that I should thank the Commissioner for all the work that he has carried out these past years. Mr Commissioner, obviously we have not always seen eye to eye, yet when we look back at the taxation sector I believe that today we have a fairer and more efficient system for our citizens, namely the citizens of the European Union.

 
  
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  Leonardo Domenici, rapporteur.(IT) Madam President, ladies and gentlemen, I would like to express my thanks for the comments on our reports, the products of a collective effort. I hope that these comments are a good omen for a positive vote by the European Parliament.

I believe that – as Mr Stolojan and Mr Casa also said – our reports deserve support, if only on behalf of all our fellow citizens: honest taxpayers, who are the first to suffer from fraud and tax evasion. The aim is to make everyone pay, so that each individual has to pay less.

I would just like to make two comments. Mrs Lulling spoke, at the beginning of the debate, about tax colonoscopy. I know from experience that a colonoscopy is not a pleasant examination, even if it can be very beneficial to human health. In the sphere of tax, there is a very simple way of avoiding it: it is simply not to conceal, not to hide one’s own income and not to evade one’s legal obligations.

The second comment is that it is right to always be concerned about how public money is being used, but it is also right to do so when governments are forced to use that public money to bail out banks and financial institutions that have speculated their money.

 
  
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  President. – The joint debate is closed.

The vote will take place on Wednesday, 10 February 2010.

Written statements (Rule 149)

 
  
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  Sebastian Valentin Bodu (PPE), in writing.(RO) VAT fraud is a criminal activity which has a huge impact on budgets, with illegal refund schemes being used in all Member States, Romania being no exception (for example, carousel fraud).

The reverse charge system introduced by some Member States, including Romania, has worked very well. However, it was also necessary to adapt VAT Directive 2006/112/EC to the current situation in order to keep the risk of illegal VAT refund schemes (the type based on fictitious exports) to an absolute minimum. This is why applying a reverse charge to products at a high risk of tax fraud is a reliable procedure which has a positive overall impact on the budget, even though there is a delay in payment to the national budget of the VAT accruing on the transactions liable for such a tax.

In conclusion, faced with the choice between receiving the VAT only at the end of the economic cycle when the finished product or service reaches the end user and avoiding fraud involving illegal VAT refunds, the first option is the correct choice. The ideal scenario would be for the reverse charge to be applied as a rule rather than the exception. However, this step should be taken after an in-depth analysis of the impact on the budget.

 
  
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  Alan Kelly (S&D), in writing. – I just wish to raise one particular point regarding cooperation on taxation between Member States. This was a major issue of sensitivity during the Irish referendum campaign on the Lisbon Treaty. There is just a note of caution I wish to give my colleagues in Parliament. Cooperation between Member States is the foundation of this Union; however, that cooperation has always been based on mutual consent. What we must be careful of in the field of taxation is not taking into account the needs of certain Member States. Certain countries need to apply rules differently: if, for example, a country is an island, or does not have a population to support a large, functioning market, it needs to use every advantage at its disposal to attract investment. I call on colleagues to bear this in mind when making proposals on this matter. Proposals should not interfere with subsidiarity. Any proposals will need the approval of Member States. It is not an unimportant element of this debate.

 
  
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  Ramona Nicole Mănescu (ALDE), in writing.(RO) The tax-related initiatives discussed today play a particularly important role in the battle against cross-border tax fraud and evasion, issues which have a major political aspect and serious consequences for Member States’ budgets. The promotion of good governance in tax matters requires action at EU level and outside the EU, as well as across Member States. We need strong measures, simple, transparent laws and, by extension, less bureaucracy. Last but not least, we need to ensure that citizens have access to assistance.

Measures such as guaranteeing transparency, exchanging information at every level, improving the assistance given to Member States, establishing effective cross-border cooperation and fair tax competition are essential objectives, especially now during the current financial crisis, when we have all seen how important the sustainability of tax systems is. The Member States with good governance in tax matters have been able to respond much more quickly and effectively to the economic crisis.

I welcome the Commission’s initiative and the work done by the rapporteurs. I believe that there is the political desire to promote good governance in tax matters. However, we need to ensure that these proposals are more than just political sound bites and take action to implement them as quickly as possible.

 
  
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  Marianne Thyssen (PPE), in writing. – (NL) Madam President, the tax authorities face a challenging task in the globalised, all-digital world. The detection of fiscal and social fraud is complex even in the internal market. Moreover, the lack of current European legislation on cross-border administrative cooperation between tax authorities is problematic. Therefore, the establishment of a taxation liaison office for each Member State to accelerate and simplify administrative cooperation between Member States merits our support. Currently, requests for tax information sharing take so long that tax administrations often simply decide against waiting for the information. The option of an automatic exchange of information proposed by the Commission receives my full support, for two reasons. Firstly, it will enable Member States to collect their taxes more efficiently, which, in times of crisis, is only fair and by no means a luxury. Secondly, it will mean operators in the internal market being treated equally. The principle of reciprocity in tax information sharing is also in line with the agreements within the OECD and the G20. This is an unmistakeable message for which the Belgian Court of Auditors also – rightly – made an urgent call not long ago. Therefore, I shall be endorsing the report by Mrs Alvarez with conviction.

 
Last updated: 31 March 2010Legal notice