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European Union: Commission Recommends Measures to Fight Tax Evasion

(July 2, 2012) On June 28, 2012, the European Commission published the Communication from the Commission to the European Parliament and the Council on Concrete Ways to Reinforce the Fight Against Tax Fraud and Tax Evasion Including in Relation to Third Countries. (COM(2012) 351 (June 27, 2012), EUROPA.)

The Communication addresses, at their request, the concerns of European Union Member States relating to the pervasive phenomenon of tax fraud and tax evasion across the EU and suggests a number of concrete measures directed at ameliorating the situation at the national, EU, and international levels. (Id.)

At the national level, the Commission urges EU Members to reinforce their capacity to collect taxes, as laid down in the Country Specific Recommendations (2012-2013). These recommendations are tailored to the individual needs of each EU Member State and provide guidance to improve financial and structural reforms; they are available online (EUROPA, (last visited June 29, 2012)). The Commission intends to monitor the situation in each Member State and also to provide technical expertise, if needed. (Id.)

At the EU level, the Commission cites the EU Savings Directive, which requires EU Members to exchange information on non-resident taxpayers who have assets up to the value of €20 billion (about US$24.9 billion). (Council Directive 2003/48/EC of 3 June 2003 on Taxation of Savings Income in the Form of Interest Payments, OFFICIAL JOURNAL OF THE EUROPEAN UNION, 2003 (L 157) 38.)

In addition, the Commission put forward several other proposals, including implementation of the use of European cross-border tax identification numbers, to supplement national tax ID numbers in use in some Member States. This will be an expeditious mechanism to be used in cases of value-added-tax (VAT) fraud, and the adoption of basic EU rules on tax evasion and fraud. (Id.)

At the international level, the Commission is authorized to negotiate savings agreements with neighboring countries. The Commission also intends to adopt measures to tackle illegal tax havens and to deal with aggressive tax planners. Such measures will be introduced before the end of 2012. (Id.)