Saturday 3 April marks five years since the astonishing leak of 11.5 million documents from the Panama-based tax advisory company Mossack Fonseca.
While the Panama Papers exposed how the world’s elite hide their money offshore, Anders Dahlbeck, Global Tax Policy Manager at ActionAid, argued in a Euronews View article that we don’t have to look far to see how many countries in the EU facilitate tax abuse.
He called out countries such as the Netherlands and Luxembourg as among the world’s biggest facilitators of tax dodging, with others such as Ireland, Cyprus and Malta also having tax haven features, which he brands “completely unacceptable”.
According to Dahlbeck, the OECD and the European Union have taken some measures to increase transparency, but in practice, billionaires and businesses trying to avoid taxes and launder money can still find ways to do so as our leaders have not fundamentally changed the laws and regulations that allow them to do so.
But a commission spokesperson told Euronews the complex issue of tackling the flow of dirty money is not new and gave a breakdown of how the bloc is tackling tax avoidance.
Here is a breakdown of the Commission’s response.
On tax avoidance
The Commission has been extremely proactive over the past years in tackling tax avoidance and has driven forward a very ambitious agenda to increase tax transparency and fight aggressive tax planning.
As a result, we now have a very robust legislative framework in place in the EU, with some of the highest tax transparency standards in the world.
However, that does not mean that we can be complacent, and we are continually working to further strengthen our armoury against tax abuse.
For example, the Tax Action Plan includes initiatives to help tax authorities better exploit existing data and share new data more efficiently, in a way that will improve the enforcement of tax rules and help combat tax fraud and evasion more effectively.
Additionally, as part of the Action plan, in its Communication on Tax Good Governance, the Commission has announced a reform of the Code Conduct on Business Taxation, which would allow to more effectively tackle harmful tax regimes within and outside the EU. It also includes the creation of the EU Tax Observatory.
On money laundering
The complex issue of tackling the flow of dirty money is not new.
The fight against money laundering and terrorist financing is instrumental for ensuring financial stability and security in Europe.
Legislative gaps occurring in one Member State have an impact on the EU as a whole.
That is why EU rules should be implemented and supervised efficiently in order to combat crime and protect our financial system.
Ensuring the efficiency of EU AML framework is at the forefront of Commission’s priorities outlined in its Action plan adopted on 07 May 2020.
In particular, within the EU, we have been ramping up our anti-money laundering rules, which are now the toughest in the world. As mentioned, we have also been working on stepping up supervision at EU level and enforcement and implementation of existing rules.
Last May, the Commission adopted a comprehensive Action Plan to tackle money laundering and terrorist financing. It focuses on better enforcement of legislation, better supervision, better coordination among Financial Intelligence Units, and a stronger role in setting international standards.
The Commission will present a legislative proposal on Anti-money Laundering in 2021.
On Country-by-country reporting (CBCR)
A healthy Single Market needs fair, efficient and growth-friendly tax systems.
In April 2016, the Commission came forward with a proposal to address the EU citizens’ demand for transparency on corporate taxes paid by large companies.
Our aim is to have more transparency from the biggest multinational enterprises operating in Europe – whatever their nationality and sector of activity.
Therefore, we welcome the negotiation mandate obtained by the Presidency on 3 March at the COREPER, which allows (us) to start the inter-institutional discussion phase of the legislative process.
The Commission stands ready to contribute to resolving any remaining issues.