| Author (Person) | Chapman, Peter |
|---|---|
| Series Title | European Voice |
| Series Details | Vol.9, No.29, 11.9.03, p37 |
| Publication Date | 11/09/2003 |
| Content Type | News |
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Date: 11/09/03 By Peter Chapman TAX-DODGING EU firms and citizens face a clampdown under a law that would force national tax inspectors to swap data on culprits who slip off the single market's faulty fiscal radar. The draft directive unveiled by Single Market Commissioner Frits Bolkestein aims to speed up the flow of information between tax authorities by letting them coordinate their investigations. It also allows them to carry out more procedures on behalf of each other. Under the law, which requires approval by member states and MEPs, tax authorities would also be expected to use domestic procedures whenever they carry out checks on behalf of their foreign counterparts. This would speed up tax probes because domestic procedures are usually far quicker and simpler. "The progressive removal of cross-border tax obstacles for individuals and businesses operating within the internal market must not also provide increased opportunities for tax dodgers and cheats," said the Dutch commissioner. "Every taxpayer must pay what he owes and strengthened cooperation between member states is the best way to ensure this." A report by experts in a special Council of Ministers group on tax fraud said it was difficult to give precise figures for cross-border cheating. But the directive tackles a plethora of practices that the group warned are currently escaping detection. These include false invoicing of goods and services, with the aim of increasing deductible costs for tax purposes. Claiming personal entertainment - such as lavish dinners and lunches - as business costs was also a major headache, the experts said. Meanwhile 'taxpayers' often use a fictitious tax domicile in order to avoid paying taxes in their actual home country, they added. The tax cooperation plan is the latest EU proposal to tighten the grip on tax evasion by Europe's citizens. Member states agreed earlier this year to a directive that would clamp down on savers trying to avoid taxes by depositing money abroad. Under the savings tax directive, member states will exchange information on interest paid to savers resident in other member states from 2005. For a transitional period, Belgium, Luxembourg and Austria - which currently have high levels of banking secrecy - will be allowed to apply a withholding tax instead of providing information. As part of the agreement, the Commission reached a crucial deal with Switzerland - which jealously guards its banking secrecy - whereby Swiss authorities agreed to swap limited amounts of data with EU authorities and charge a withholding tax. The savings tax law will be formally approved once the European Commission convinces smaller financial centres, Monaco, San Marino, Andorra and Liechtenstein, to agree to a similar regime. |
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| Subject Categories | Justice and Home Affairs, Taxation |
