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MEPs back sweeping recommendations of special inquiry into tax crimes

13/12/2017
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Open registers of beneficial owners, effective whistle-blower protection and rules for intermediaries are a must to fight tax evasion, say MEPs.
 
> Push for publicly accessible beneficial owners registers
> Rules for and sanctions against intermediaries aiding aggressive tax planning
> Call for future permanent committee of inquiry on taxation

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The measures are among 211 recommendations made by Parliament’s Special Inquiry Committee into Money Laundering, Tax Avoidance and Evasion (PANA) which MEPs backed on Wednesday, by 492 votes to 50 with 136 abstentions.

Major recommendations made by the committee include:

    “regularly updated, standardised, interconnected and publicly accessible” beneficial ownership registers of companies, foundations, trusts and similar legal arrangements,

    new rules to regulate intermediaries, such as lawyers and accountants, who aid aggressive tax planning, plus  “incentives to refrain from engaging in tax evasion and tax avoidance”,

    a common international definition of what constitutes an offshore financial centre, tax haven, secrecy haven, non-cooperative tax jurisdiction and high-risk country, (Para 14)

    tools to support whistle-blowers to ensure that they are given effective protection and adequate financial assistance, and “dissuasive” penalties at both EU and national levels against banks and intermediaries “that are knowingly, wilfully and systematically involved in illegal tax or money laundering schemes.”

    a permanent committee of inquiry on the model of the US Congress.

In other recommendations, MEPs regretted that several EU member states had featured in the Panama Papers and pointed to the “lack of political will among some member states to advance on reforms and enforcement.”

EU legislation on tax policy currently requires unanimity among member states. MEPs call for that requirement to be replaced by qualified majority voting in the Council.  They also want a radical overhaul of the Code of Conduct Group, “to radically redefine” its “governance structure and transparency.”

Quotes

Co-rapporteur Jeppe Kofod (S&D, DK) said:

“We need a paradigm shift in European tax policy, to combat tax havens, tax avoidance and tax evasion. That is abundantly clear to me after having spent 18 months poring over secret Council documents.”

Co-rapporteur Petr Ježek (ALDE, CZ) said:

“The PANA committee investigations built on the journalists' revelations with the aim of keeping up momentum, scrutinising relevant EU legislation and its implementation and coming up with credible recommendations on how to tackle money laundering, tax avoidance and tax evasion. Today, we have reached these goals. In the coming months, it will be crucial to maintain pressure as regards implementation of the recommendations and additional pressure on those governments which are still not fighting the good fight.”

Next steps

The report and recommendations of the special inquiry committee will now be passed on to the Council and Commission for their consideration.

Quick facts

This vote wraps up 18 months’ work by the special committee, set up in June 2015 in the wake of the Panama Papers revelations, with the aim of stamping out the practices revealed by the leaked documents.

PANA Committee webpage