EU names seven member states as ‘tax havens’

Ireland is one of seven EU countries which display traits of a tax haven and facilitate aggressive tax planning, according to a year-long inquiry by a special committee of the European Parliament set up to investigate tax avoidance in the wake of the LuxLeaks, Panama Papers and other scandals

The special committee on financial crimes, tax evasion and tax avoidance (TAX3) has presented its final report, which will see the European Parliament adopt a detailed roadmap towards fairer and more effective taxation and tackling financial crimes.

The recommendations, adopted by 505 votes in favour, 63 against and 87 abstentions, range from overhauling the system to deal with financial crimes, tax evasion and tax avoidance, notably by improving cooperation in all areas between the multitude of authorities involved, to setting up new bodies at EU and global level.

According to TAX3’s findings, Ireland, as well as Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta and the Netherlands, all share some characteristics of tax havens. Its report claims the Netherlands, by facilitating aggressive tax planning, deprives other EU member states of €11.2bn (£9.6bn) of tax income.

The committee also wants golden visas and passports phased out, with those offered by Malta and Cyprus singled out for their weak due diligence, and criticises Denmark, Finland, Ireland and Sweden for maintaining their opposition to the digital services tax.

It singles out several European banks as being involved in the Russian ‘Troika Laundromat’ money-laundering, including Danske Bank, Swedbank, Nordea Bank, ING Groep, Credit Agricole, Deutsche Bank, KBC Group, Raiffeisen Bank International, ABN Amro Group, Cooperatieve Rabobank and the Dutch unit of Turkiye Garanti Bankasi.

It says there is a lack of political will in member states to tackle tax evasion/avoidance and financial crime and calls for the European Commission to start work immediately on a proposal for a European financial police force and an EU financial intelligence unit, as well as setting up an EU anti-money laundering watchdog should be set up.  It also wants a global tax body to be established within the UN.

In addition, the committee says whistleblowers and investigative journalists must be much better protected and an EU fund to help investigative journalists should be set up.

Petr Iezek, chair of the special committee, said: ‘Member states are not doing enough and in the EU, the Council is clearly the weakest link. Without political will, there can be no progress. Europeans deserve better.’

Co-rapporteur, Jeppe Kofod, said: ‘This report is the result of the most comprehensive work ever done by the European Parliament on tax evasion and avoidance. Within the EU we need a minimum corporate tax rate, an end to tax competition and to make it more difficult to bring dirty money in.’

TAX3 held 18 hearings covering particular topics of interest, 10 exchange of views with finance ministers and European Commissioners, and four fact-finding missions, to the US, the Isle of Man, Denmark and Estonia, and Latvia, as part of its inquiry.

Report on financial crimes, tax evasion and tax avoidance 

Report by Pat Sweet

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