European Commission Presents Way Forward on Tax Evasion and Avoidance

Algirdas Šemeta, European Commissioner for Taxation, says *”Around one trillion euros is lost to tax evasion and avoidance every year in the EU. Not only is this is a scandalous loss of much-needed revenue, it is also a threat to fair taxation. While Member States must toughen national measures against tax evasion, unilateral solutions alone won’t work. In a Single Market, within a globalised economy, national mismatches and loopholes become the play-things of those that seek to escape taxation. A strong and cohesive EU stance against tax evaders, and those that facilitate them, is therefore essential.”*

The Commission today presented an Action Plan for a more effective EU response to tax evasion and avoidance. It sets out a comprehensive set of measures, for now and for the future, to help Member States protect their tax bases and recapture billions of euros legitimately due.

The first Recommendation encourages Member States to identify tax havens and place them on national blacklists. Specified measures to persuade these non-EU countries to apply EU governance standards are also set out.

The second Recommendation on Aggressive Tax Planning suggests ways to address legal technicalities and loopholes which some companies exploit to avoid paying their fair share.

The EU maintains that today’s Action Plan will serve as a robust EU contribution to the international debate on evasion and avoidance, particularly within the OECD and G20. As such, it will support the EU’s position in pushing for higher standards of tax good governance globally.

Click [here ](http://europa.eu/rapid/press-release_IP-12-1325_en.htm)for full details.

Note: In March 2012 Member States had asked the Commission *”to rapidly develop concrete ways to improve the fight against tax fraud and tax evasion, including in relation to third countries”.*

As a first response to this request, the Commission adopted a Communication in June, setting out key challenges posed by tax fraud and evasion, and concrete measures to address them ([see IP/12/697](http://europa.eu/rapid/press-release_IP-12-697_en.htm)). The Communication also announced that the Commission would come forward with an Action Plan before the end of the year, along with specific ideas on how to better tackle tax havens and aggressive tax planning. This is what the Commission has presented today.