The Commission must set out more precise hallmarks for the proposed reporting obligations on cross-border tax arrangements and transactions, in order to prevent subjective interpretation by taxpayers and tax authorities, which could lead to over-reporting and administrative burdens, the EESC urges in its opinion on disincentives to tax avoidance or evasion.
The Commission's new directive puts forward an obligation for intermediaries – entities, companies or professionals that give advice to taxpayers on tax planning – and in some cases taxpayers themselves, to report tax schemes that fall within four standard types of reportable activities to their authorities. The information will be automatically exchanged between national tax authorities.
"The scope of the proposed hallmarks is too broad", said rapporteur Victor Alistar (Various Interests, RO). He added that "when revising the criteria, the Commission must strike a balance between legal certainty and flexibility, to ensure the effectiveness of the deterrent and the feasibility of the obligation."
The EESC also asks the Commission to elaborate on how the directive applies to the digital economy and to ensure the proportionality of the directive through keeping administrative costs low for all businesses.
The Committee endorses the proposed logistical and technical support for the implementation of the respective tools in the Member States, as well as the aim of increasing the transparency of intermediaries' activities by means of the proposed measures .
"The reporting obligation will deter intermediaries from offering aggressive tax planning schemes. The mechanism will create tax justice and contribute to fair competition and stable tax revenues for Member States", said co-rapporteur Petru Sorin Dandea (Workers, RO). (jk)