European citizens are picking up the bill for tax avoidance

©shutterstock/ Olivier Le Moal
©shutterstock/ Olivier Le Moal

EESC calls for uniform and swift implementation of the Anti-tax-avoidance package in its opinion adopted today at the EESC plenary.

Aggressive tax planning, a practice in particular used by some multinational corporations, is eroding tax bases in the EU member states by 50 to 70 billion Euro every year. The EU has finally decided to push for an end to this approach, often even seen as "legitimate" by tax avoiders. The EESC strongly supports the EU proposal for laying down rules against tax avoidance. However, it calls for a more rigorous stance towards tax avoiders, while at the same time safeguarding the EU's competitiveness through intense negotiations at the level of the OECD and the G20.

"Tax avoidance is an offence, harmful for all of our societies", said Petru Sorina Dandea, Rapporteur of the opinion on the anti-tax-avoidance package.

The EESC proposes a uniform implementation of rules along the lines of the OECD's action plan on Tax Based Erosion and Profit Shifting which are also implemented by other international partners across the Member States. Furthermore, the EESC urges the Commission and Member States to step up international negotiations in the framework of institutions such as the OECD or the G20 to ensure uniform implementation at the OECD level, including in the United States and other significant economic jurisdictions. We should also explore how the proposed rules can even be applied to financial corporations.

"Taxes are an important instrument for states to compensate inequalities in our society. We need them for infrastructure, education and support for people in need. Therefore, tax avoidance cannot be seen as a peccadillo, in truth it is theft from the state and in the end from the society", said Mr. Dandea.

The EESC also recommends that the switch-over clause – a switch from a tax exemption of foreign income to relief by credit – should be applied directly to all taxpayers who have generated income in jurisdictions acknowledged to be tax havens. 

The EESC calls on the Commission to also include in its directive the requirement that Member States disclose the data presented in the reports which will be subject to the automatic exchange of information. At the same time, it considers that these reports should not be demanded from SMEs in order to avoid a disproportionate cost impact. "SME's are the columns of the EU Member States' economies. They usually pay their taxes and don't have the possibilities and tools for tax avoidance. We have to avoid imposing additional administrative burden on them, as the cost impact would be disproportionate", said co-rapporteur Roger Barker.

A ranking list of countries and regions which refuse to apply good governance standards in tax matters should be drawn up. Given the damage done to Member States' tax bases by aggressive tax planning, the EESC is calling for a short deadline for the implementation of the directive and considers the current three-year deadline as too excessive.

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