As part of an effort to cut down on tax evasion, the European Commission has set up a new initiative it is calling, the Platform for Tax Good Governance.
The committee will monitor member states' progress in tackling aggressive tax planning and clamping down on tax havens, in line with the recommendations presented by the Commission last year. The goal of the platform is to ensure that real and effective action is taken by member states to address tax avoidance problems, within a coordinated EU framework, the Commission stated.
The move is part of an effort to strengthen tax compliance among EU member states. The Platform for Tax Good Governance was one of the initiatives set out in the Commission's action plan against tax evasion in December 2012, along with other goals. In the short term, EU measures will include a taxpayers' code to improve compliance and standardised forms for information exchange. The Commission will review the anti-abuse provisions in the Directives on Parent-Subsidiary, Mergers and Interest and Royalties.
In the medium and long term, measures will include an EU Tax Identification Number (TIN), an EU tax web portal, guidelines for tracing money flows and possibly common sanctions for tax offences.
The platform will be comprised of a wide cross-section of members, including national tax authorities, European Parliament, businesses, academics, NGOs,and other stakeholders. This will also facilitate dialogue and exchange of expertise, which can feed into a more coordinated and effective EU approach against tax evasion and avoidance, the Commission said in a statement introducing the platform.
It will be made up of around 45 members: a high level delegate from each Member State's tax authority and up to 15 non-governmental representatives. The latter will be appointed by the Commission, on the basis of an open application process. The call for applications has also been launched today, with a view to selecting the organisations to participate. Organisations will be selected for a 3 year mandate, which can be renewed through a further successful application after that period.
"In battling tax evasion, we are battling to protect the fairness of our tax systems, the competitiveness of our economies and the solidarity of our Member States,” said Algirdas Semeta, Commissioner for Taxation, Customs, Statistics, Audit and Anti-Fraud. “There is too much at stake for this battle to be lost. The renewed vigour amongst Member States to take up this fight is more than welcome. It must now be channelled into action. The Platform I am launching today will keep Member States on their toes. It will ensure results mirror expectations when it comes to fighting tax evasion."
The first recommendation of the action plan against tax evasion foresees a strong EU stance against tax havens, going beyond the current international measures. Using common criteria, member states are encouraged to identify tax havens and place them on national blacklists.
The second recommendation sets out ways to block off loopholes for companies to avoid paying taxes. These include reinforcing the anti-abuse provisions in bilateral tax treaties, national legislation and EU corporate legislation. Any artificial arrangement carried out for tax avoidance purposes would be ignored and companies would be taxed instead on the basis of actual economic substance.
The first meeting of the platform is planned for June 2013.