THE EUROPEAN COMMISSION will "blacklist" countries known to be tax havens after it brought in a series of measures to combat tax evasion and avoidance.
Taxation and anti-fraud minister Algirdas Semeta said tax avoidance and tax evasion cost the EU economy around €1trn (£810bn) a year.
"Arguing they [tax avoidance schemes] are legal doesn't make them right. They go against the very nature of corporate social responsibility," he concluded.
Other proposals from the EC include a taxpayers' code, an EU tax identification number, a review of the anti-abuse provisions in relevant areas of EU legislation, and common guidelines to trace money flows.
Corporate tax partner at law firm Berwin Leighton Paisner Gary Richards said: "It is interesting that days before the UK draft legislation on a general anti-abuse rule is published, the EU issues a recommendation that member states adopt a common GAAR, so keeping up the pressure on governments to harmonise their tax system.
"However, the EC's intentions may well be undermined by governments' wariness about compromising their tax sovereignty or losing their ability to fine-tune their own tax regimes and influence tax competitiveness."
It occurs to me that headline tax rates and the "race to the bottom" which George Osborne has bought into is pretty much irrelevant unless tax avoidance rules are strengthened (and beyond the UK's new GAAR).
A tax rate could be 100% or 10% but neither would raise £1 if companies continue to see tax as a cost to be controlled by any means rather than a legitimate price of doing business in a certain country.
Posted by: Richard, 07 Dec 2012 | 15:06
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