Brussels, 8 June 2010
Combating tax fraud and harmful tax practices: Commissioner Šemeta welcomes two important agreements in ECOFIN
Commissioner Šemeta has welcomed today’s agreement by EU finance ministers on a proposal which will help greatly in the fight against tax evasion and fraud. The proposal to revise the Regulation on administrative cooperation in VAT sets out a series of measures to extend and reinforce the exchange of information and cooperation between tax authorities. These include a common approach to the registration/deregistration process of VAT taxable persons, a precise definition on the information to be exchanged between Member States and increased security on the information given to taxpayers seeking to confirm VAT numbers. A key element of the proposal is a legal base to establish Eurofisc, a network for closer cooperation and faster information exchange between Member States to detect fraudsters. VAT fraud is a serious problem in the EU; losses in VAT receipts from fraud are estimated to be around 10% every year.
Commissioner Šemeta said “In exiting the economic crisis, tackling tax fraud and evasion has become a key element in the consolidation of public funding. With this proposal, we will have a new tool to strengthen cooperation and improve the efficiency of our efforts to stamp out this illegal activity.”
The ECOFIN Council also adopted draft conclusions on a report by the Code of Conduct Group on Business Taxation. The Code of Conduct Group was set up in 1997 to identify and tackle harmful tax measures which can adversely affect other Member States' corporate tax base. Through this Group, Member States commit to not introducing any new harmful tax practices (such as tax-benefits reserved for non-resident businesses, tax incentives for activities isolated from the domestic economy etc), and to rollback harmful practices already in place. The Group presents a report on its work at the end of each Presidency. On the basis of the Group’s latest report, the Council has called on the Commission to start discussions with Switzerland and Lichtenstein with a view to encouraging them to apply the principles of the Code of Conduct. Commissioner Šemeta welcomed this mandate and will report back on the progress made in this work by the end of the Belgian Presidency.