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Anti tax avoidance measures in Europe (ICAEW)

Anti tax avoidance measures in Europe
by Tax Faculty Team on 25.07.2016 18:19
Topics: Tax avoidance, International

Recent developments

On 5 July 2016, the European Commission issued a Communication on further measures to enhance transparency and the fight against tax evasion and avoidance, setting out two proposed legislative changes, to the Anti-Money Laundering Directive and the Administrative Cooperation Directive, to enhance access to beneficial ownership information, and considering mandatory reporting rules for tax advisers and “promoters” of tax planning schemes. The Communication is a reaction to the “Panama Papers” revelations on secret offshore companies of April 2016.

The legislative changes will require member states to allow tax authorities access to their beneficial ownership registers, set up for anti-money laundering purposes.

The Commission also proposes that existing, not only new, accounts should be subject to due diligence controls under anti-money laundering rules, to prevent accounts that are potentially used for illicit activities from escaping detection. Passive companies and trusts would also be subject to greater scrutiny and tighter rules.

Apart from improving access to beneficial ownership information, the Commission will examine how member states could automatically exchange information on beneficial owners of companies and trusts with a potential tax impact.

The Commission intends to carry out a public consultation in autumn 2016 into mandatory reporting rules for tax advisers and promoters of tax planning schemes. It will also work on a possible global approach, going beyond the OECD (BEPS 12) Recommendations of October 2015.

The Commission is planning to present an EU list of non-cooperative jurisdictions in 2017. It has asked the EU Council´s Code of Conduct Group to consider possible countermeasures against listed jurisdictions.

While the Communication stresses the need to protect whistle-blowers in certain areas including taxation, the Commission will, for the time being, limit itself to monitoring existing national arrangements.

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