13 November 2012

Commission Communication on tax fraud and tax evasion - Council conclusions

1. The Council underlines the importance of intensifying action against tax fraud and evasion as requested by the European Council in June 2012, and set out in its report on this issue. The Council therefore welcomes the Communication on concrete ways to reinforce the fight against tax fraud and tax evasion including in relation to third countries presented by the Commission in July 2012.

2. The Cyprus Presidency has submitted it to the Council High Level Working Party on Tax issues (HLWP). Member States were given the opportunity to express views on the priorities set out in the Communication regarding tax evasion and fraud, with a view to the presentation by the Commission of an Action Plan as well as a Communication on tax havens and aggressive tax planning later this year.

3. The Council notes that all Member States recognise the importance of taking effective steps to fight tax evasion and fraud, also in times of budgetary constraints and of economic crisis.

4. The Council takes the view that, when prioritising steps to fight tax evasion and fraud, it will be important to pay attention to both the area of direct and indirect taxation, without connecting them, and to concentrate on actions for the short term. Action at the level of Member States will be essential to fight tax fraud and evasion, but common efforts should also be made at EU level in areas where this would add value, increase coherence and efficiency of tax collection and help closing loopholes. Particular attention should be paid to the efficient and cost-effective implementation of already existing EU legislation and IT systems, as well as to burdens on businesses and tax administrations. Beyond legislative instruments the EU should consider pragmatic tax coordination at the level of the Council and support, where appropriate, coherent action in relation to third countries, while taking relevant work in international fora into account. Furthermore, the EU should support the dissemination of best practices with regard to the national systems for enforcement of tax laws and effective collection of taxes.

5. As far as the suggested actions are concerned, the Council would see progress on the following issues as a priority:

In the field of direct taxation:

• carrying forward work and discussions on the revision of the Savings Directive and reaching rapidly an agreement on the negotiating directives for savings agreements with third countries, as recalled by the European Council conclusions of 28/29 June 2012;
• ensuring effective information exchange between administrations;
• exploring the possibility of deepening administrative co-operation in the area of direct taxation.

In the field of indirect taxation:

• combating the considerable losses in the field of VAT inter alia by continued work with and analysis of possible measures to combat tax evasion effectively, taking into account Council conclusions adopted in May 2012;
• ensuring effective information exchange between administrations, and effective use of the existing computerised control system in the area of excise duties.

6. The Council also notes that some areas mentioned in the Communication should not be taken forward as a priority at this stage, such as:

• administrative and criminal sanctions;
• joint audits.

7. The Council is looking forward to the Action Plan to be submitted by the Commission together with a Communication on tax havens and aggressive tax planning. It requests appropriate preparatory Council bodies to examine both, once they have been put forward.

Commission Communication

© European Council