Tax avoidance targeted by European Union

Euro notes The Commission said EU members lose 1tn euros a year through tax evasion and avoidance

Related Stories

The European Commission has announced a series of proposals designed to tackle the "scandalous loss of much-needed revenue" EU members suffer through tax evasion and tax avoidance.

These include a tougher stance on tax havens and ways to close loopholes.

Some big companies take advantage of these loopholes to avoid paying millions of euros in tax.

The Commission said around 1tn euros ($1.3tn; £800bn) is lost every year in the EU by tax avoidance and evasion.

"While member states must toughen national measures against tax evasion, unilateral solutions alone won't work," said Commissioner for Taxation Algirdas Semeta.

"In a single market, within a globalised economy, national mismatches and loopholes become the play-things of those that seek to escape taxation.

"A strong and cohesive EU stance against tax evaders, and those that facilitate them, is therefore essential."

'Harmful competition'

The package of measures includes two main recommendations. The first "encourages" member states to identify tax havens and place them on "national blacklists". Measures to persuade these havens to apply EU law are also laid out.

The second suggests ways for member states to address the kinds of legal technicalities and loopholes companies use to pay less tax.

Members should also adopt a common General Anti-Abuse Rule, whereby they can ignore artificial tax avoidance schemes and tax the underlying sum of money, the Commission said.

It also called for a clampdown on what it called "harmful tax competition", where member states compete with each other to provide the most benign tax environment. If necessary, the Commission said it would come up with the "legislative proposals for action".

A number of major global companies, including Amazon, Starbucks and Google, have come under fire in recent weeks for paying very little tax relative to their profits in the UK.

The UK Treasury is also clamping down on tax evasion and avoidance, both by companies and individuals, in an effort to raise much needed-revenue. This includes giving greater resources to the Inland Revenue to pursue those paying less tax than they should.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features & Analysis

  • Leonardo da Vinci Self-PortraitMagical masterpiece

    The Leonardo hidden from Hitler in case it gave him special powers


  • Woman smelling pot of herbsWake up

    Is eating sage better for your alertness than coffee?


  • George Foreman and Muhammad AliThe Rumble

    Was this the most compelling sporting event last century? BBC Sport


  • GunGun dilemma

    What if you had a killer product on your hands - literally?


Elsewhere on the BBC

  • EarthWater world

    Are ‘oceans’ hiding inside Earth? BBC Future investigates

Programmes

  • Francis Rossi, co-founder of band Status QuoHARDtalk Watch

    Status Quo's Francis Rossi explains how alcohol led him to take cocaine

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.