Bloomberg News

EU Pledges Campaign Against 1 Trillion Euros in Tax Evasion

May 15, 2012

The European Commission today pledged to step up its fight against an estimated 1 trillion euros ($1.28 trillion) in tax evasion.

European Tax Commissioner Algirdas Semeta later this year will offer new proposals to combat tax havens and “aggressive tax planning,” so that nations don’t lose revenue to unfair investment strategies, the EU said in a document distributed to reporters in Brussels today. The commission, the European Union’s regulatory arm, will also seek to limit opportunities to exploit loopholes among national tax rules.

EU finance ministers are meeting in Brussels today and will discuss whether to give the commission room to negotiate tax agreements with Switzerland, San Marino, Liechtenstein, Monaco and Andorra. In 2010, EU nations collected about 330 million euros in savings tax withholdings from Switzerland, according to the commission document.

“It is expected that a revised EU-Swiss agreement, with a broader scope and stronger provisions, could deliver a substantially higher figure,” the commission said. “It’s difficult to estimate a precise figure at this point, given the intransparent nature of tax evasion, but member states would certainly benefit from considerable new revenue.”

Austria and Luxembourg have opposed the commission’s negotiating mandate, citing concerns that such a move would threaten their current policies. Austria won’t bow to pressure to loosen its banking secrecy rules as part of a Europe-wide interest taxation plan, Finance Minister Maria Fekter said.

“I’m besieged from all sides and you know me: I will stand my ground,” Fekter told reporters before a meeting of European Union finance ministers in Brussels today.

All EU tax decisions require unanimity among the 27 governments. The EU will help nations that want help improving tax collection.

“Any member state that needs support will get it,” the document said. “In Greece, for example, commission services are actively engaged in helping build a more robust tax system to deliver quality revenues, and positive results are already beginning to emerge.”

To contact the reporter on this story: Rebecca Christie in Brussels at Rchristie4@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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