EU: New plan, actions to foster tax transparency

EU: New plan, actions to foster tax transparency

The European Commission today announced next steps in its campaign to boost tax transparency in order to address tax evasion and avoidance in the EU, in light of issues highlighted with public release of the “Panama papers.”

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As noted in the EC release, the “Panama papers” exposed how secret companies and accounts can be used to hide income and assets offshore—often for tax evasion and other illicit purposes. To address gaps in the tax framework in order to prevent tax abuse and illicit financial flows, the EC presented a communication setting out priorities and the following key actions:

  • Provide tax authorities with the information they need about the ultimate beneficiary behind every company, trust and fund, by means of an amendment to the Directive on Administrative Cooperation in the field of taxation
  • Extend the information available to authorities so that existing, as well as new, accounts are subject to due diligence controls
  • Increase cross-border transparency of beneficial ownership
  • Improve oversight of tax advisors' activities
  • Promote tax good governance worldwide and address uncooperative tax jurisdictions and identify the most relevant countries to screen under this process, in order to have a first EU list ready in 2017
  • Protect whistle-blowers 

What’s next?

The proposal for access to information for tax authorities (an amendment to the Directive on Administrative Cooperation for Taxation) will be submitted to the European Parliament for consultation and to the Council for adoption. Proposed amendments to the Anti-Money Laundering Directive are expected to be adopted by the European Parliament and the Council as co-legislators. The EC stated it will take forward the measures set out in the communication over the coming months and will determine the most appropriate EU-level action to take on each of them.

 

Read a July 2016 report [PDF 127 KB] prepared by KPMG’s EU Tax Centre

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