EU Commission to table new legislation against tax evasion

The European Commission has announced it will table draft new legislation before the summer designed to crackdown on tax evasion.

Pierre Moscovici | Photo credit: European Commission audiovisual

By Martin Banks

04 May 2017

Announcing the move on Thursday, European taxation Commissioner Pierre Moscovici told MEPs the aim of the planned directive was to tackle “those who promote tax evasion.”

The official told a committee hearing in Parliament, “We want to address this issue and, specifically, those who promote tax avoidance and tax evasion. This has been highlighted by recent scandals.”

He said the directive would contain measures aimed at combatting the “role played by intermediaries who know the tax rules like the back of their hand and who use them illegally.”


Moscovici was addressing the special committee set up by Parliament to investigate the Panama Papers scandal.

He said, “I cannot say today what the directive will include but we are determined to take measures to combat these harmful tax practices. The idea is to promote good tax governance. This Parliament recognises the importance of what is a real problem and we have to deal with those who encourage tax avoidance and evasion. Such people are full players in this problem.”

He gave a broad definition of intermediaries as anyone who provides tax-related services.

The new directive will not be limited just to intermediaries but will “include all potential tax practices,” he noted.

He said, “The proposal will cover all jurisdictions. The matter of sanctions also arises of course and potential sanctions, albeit non-criminal, for those who do not comply with the new rules is something that I support.”

He was mildly critical of member states, unnamed, who he said had not shown sufficient “enthusiasm or dynamism” in tackling the issue.

“There must be no let up in this but without the support of Parliament it will be very difficult.”

Separately, he also pointed out that a Commission process is underway that could establish a tax haven blacklist by the end of 2017. The executive asked member states in September to help name non-EU jurisdictions that “refuse to play fair” on tax.

Moscovici told the meeting, “I am optimistic that we will have this list by the end of this year. Setting up this list is a priority for the Commission.”

He said the new list will be “efficient” and contain “real penalties” for tax offenders, adding, “It will not be a mere paper tiger.”

Parliament rejected a similar list put forward by the executive in 2016. It sent a blacklist of 11 countries seen as at risk of facilitating money laundering or terrorist financing back to the Commission in January. MEPs demanded that tax havens be included on the list after it was rejected by two influential parliamentary committees in December for being too narrow in scope.

The economic and monetary affairs committee and the civil liberties, justice and home affairs committees both voted to reject the list.

The blacklist is part of the EU’s broad response to the Panama Papers revelations, which revealed a network of lawyers and financial advisers helping the rich avoid taxes.

More than 11 million documents were leaked from the Panamanian law firm Mossack Fonseca in April 2016, exposing complex tax arrangements in jurisdictions such as the Bahamas and the British Virgin Islands.

The Commission's previous list, put forward in November, listed countries including North Korea, Syria and Afghanistan but did not mention tax havens such as the Cayman Islands or the British Virgin Islands.

It first released a money laundering and terrorist financing blacklist in July 2016 as part of the terms of the fourth anti-money laundering directive.

MEPs are pushing the Commission to re-assess which countries should be included on the blacklist of uncooperative money laundering jurisdictions.

The Commission identifies high-risk third countries that are then subject to increased customer due diligence measures.

Werner Langen, who chairs the Panama Papers inquiry committee, praised the proposals cited by Moscovici, saying “In you, I am convinced we have a key ally in the fight against tax evasion.”

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