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President Barroso has written to national leaders setting out the challenges facing the EU on high energy prices, tax fraud and tax evasion. Estimates show that EU countries are losing out on tens of billions of euros stored in offshore tax havens. Fraud and evasion are limiting the capacity of governments to raise revenues and stick to economic policy plans.
Creating a tax system based on fairness and equity will ensure that everyone, from blue-collar workers to multi-national companies, makes a fair contribution to public finances. Action is needed at national, EU and global level to combat tax fraud and tax evasion efficiently. The Commission is proposing to widen the scope of the Savings Tax Directive. A proposal to increase the scope of automatic information exchange between countries will be presented shortly to cover dividends and capitals gains.
The Commission is also urging governments to implement its Action Plan on strengthening the fight against tax fraud and evasion, as well as its recommendations on tax havens and aggressive tax planning.
In his letter, President Barroso wrote:
Tax fraud and evasion is rapidly gaining importance in public debate and for good reason. At a time of fiscal consolidation Member States are not maximising the tax revenue they could have and the issue of fairness is squarely on the agenda. The enclosed background note illustrates the need for Member States to decide on key proposals on the Council table such as the Savings Tax Directive and to make more intensive use of the policy instruments that are already available including an ambitious implementation of the Commission's Action Plan on strengthening the fight against tax fraud and tax evasion and the two Recommendations on tax havens and aggressive tax planning.
Over several years, the EU has put the principle of automatic exchange of information at the heart of its approach. It is important to extend this to all forms of income. Therefore I am pleased to announce that the European Commission will present a legislative proposal to extend the scope of automatic exchange under the Administrative Cooperation Directive. This will ensure the full and consistent coverage of all relevant types of income across all Member States. And building on EU arrangements, collectively we should agree on a strong and coordinated EU position in the G8, G20 and OECD so that automatic exchange of information becomes the new global standard.