Brussels mulls action on aggressive tax planning
Pierre Moscovici - Photo EC
(BRUSSELS) - The European Commission launched a public consultation Thursday to gather feedback on the way forward for EU action on advisers and intermediaries who facilitate tax evasion and tax avoidance.
Recent revelations have highlighted how tax advisers help their clients to shift profits offshore for the purposes of avoiding tax.
Many companies and individuals rely on intermediaries to design financial structures that help them to avoid paying their fair share of tax. These intermediaries can include consultants, lawyers, financial and investment advisers, accountants, financial institutions, insurance intermediaries, and agents who set up companies ('Trust and Company Service Providers'). Schemes formulated by these intermediaries can often lead to a loss in tax revenues for government coffers.
Complex financial schemes and opaque corporate structures do not happen by accident, said the Economic Affairs Commissioner Pierre Moscovici.
"Some intermediaries have developed these into an art-form", he said. "These experts offer their clients the opportunity to aggressively exploit loopholes or to shift their profits so as to reduce their tax bill. The public consultation we're launching today will help us to work out ways to deter intermediaries from designing such schemes and to give our Member States greater insight and information to enable them to put a stop to these practices."
Pointing to a recent Communication on further measures to enhance transparency and the fight against tax evasion and avoidance, the Commission says it now wants to shed more light on the activities of tax advisers. It also wants to reflect on how to build effective deterrents for promoters and enablers of aggressive tax planning schemes and those who use them.
The Commission wants to gather views on how a mandatory disclosure scheme for tax advisers could be put in place. Such rules would oblige intermediaries to give early information on schemes which could be viewed as aggressive or abusive planning for tax purposes and would reflect the goals of the OECD's non-binding guidelines (BEPS Action 12) for the disclosure of aggressive tax planning strategies.
This public consultation will help the Commission decide whether it is appropriate to introduce binding rules at the EU level and, if so, what the most legal suitable legal instrument should be.
The public consultation will run until 16 February.