22 May 2013

President Van Rompuy: Tax evasion and tax fraud - It is high time to step up the fight

In his remarks following the European Council, the Council president said it had been a focused European Council, one which had set many things in motion. The next Council meeting in June will be focusing on economic policies. (Includes link to President Barroso's statement.)

We've seen headline-after-headline highlight loopholes in tax systems. Fuelling public indignation, and rightly so. The amounts are staggering. Hundreds of millions of euros go missing each year. At a time of fiscal pressure and social tensions, fighting this is a matter of fairness and credibility. I decided we had to use the momentum. Already in March, leaders had touched upon this, and the prospect of today's European Council debate put more pressure and helped set things into motion, after years of standstill.

Tax matters are always sensitive – hence the treaty-need for unanimity – but by nature tax evasion is something no country can solve on its own. And just to be perfectly clear: we're not talking about tax harmonisation, but about jointly fighting despicable practices like deliberate tax evasion. So I am pleased that today's European Council managed to unblock a number of frozen files. There is movement, a real acceleration, with clear deadlines-for-result. Especially on four points.

First, on VAT fraud: leaders expect their ministers to sign off no later than end of June on a set of rapid-response measures so governments can crack down on fraudsters. This is a breakthrough. It follows last week's breakthrough – and this is the second point – on the negotiation mandates on savings taxation agreed by finance ministers, after two years of blockage. The Union is now in a position to start negotiating straight away with Switzerland, Liechtenstein, Monaco, Andorra and San Marino to ensure these countries apply EU standards. It will do so on the basis of the revised savings directive. This in itself is an important signal, as it points to a Union-wide consensus on a text now in its fifth year of negotiation – for which we set today an end-of-the-year deadline.

Third point, and building on this, we all want the Union to push hard for a global standard of automatic sharing of information, covering a full range of taxable income, and we'll promote this strongly in fora like the G8 and G20. I am glad the timely initiative by a group of Member States that sparked this action is now firmly embedded in a Union-wide approach.

Fourthly and finally, a number of issues related to business taxation. Tackling profitshifting, tax-base-erosion and aggressive-tax-planning calls for a coordinated approach, in Europe and worldwide: we all agree on that. Here too we set deadlines for the end of the year, for instance on revising the parent-subsidiary - and the Money Laundering Directives.

Full remarks

President Barroso's statement © European Commission

See also EU leaders agree to step up the fight against tax fraud

© European Council