A new study by the European Commission concludes that the Member States of the European Union lost around 46 billion euros in tax revenue in 2016 as a result of tax evasion by private individuals. The German tax authorities alone lost around 7.22 billion euros in 2016 as a result of tax evasion. The UK tax office missed 8.52 billion euros, the French tax authorities were even paid 10.08 billion euros too little.
Based on a methodology similar to that of economist Gabriel Zucman, the EU Commission estimates global offshore assets at 7.5 trillion euros or 10.4% of global GDP in 2016. The results of the study show a slight decline in offshore assets in 2015 and 2016. Tax Commissioner Pierre Moscovici attributed the decline to international and EU reforms to combat tax evasion, most importantly to improved cross-border tax reporting on account information under the US Foreign Account Tax Compliance Act (FATCA) and the International Common Reporting Standard (CRS) and its European implementation in the Administrative Cooperation Directive (DAC2).
Offshore asset estimates are based on the gap between international securities assets and liabilities. In theory, globally, asset positions and liabilities should balance each other out, but in practice more liabilities positions are reported than asset positions. The difference is attributed to the under-reporting of offshore assets. The amount of international tax evasion is derived from the amount of offshore securities. However, important asset positions that are also misused for tax evasion, such as life insurance contracts, cash and real estate, are not covered by the methodology.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“After 20 years of international efforts against tax evasion, the billions of tax losses are still appalling. The EU’s and global progress in the fight against tax evasion has prevented further growth in offshore assets. However, the study only shows the tip of the iceberg. Many tax evaders have shifted money from accounts and deposits to real estate and intransparent corporate networks. The study says nothing about this because there is no data on the beneficial owners of real estate. It is therefore a courageous theory to claim that the damage caused by tax evasion has decreased in recent years. In order to shed light on the economic beneficiaries of real estate, the European member states must urgently introduce the national real estate registers required by the European Money Laundering Directive as of January 2020 and connect these with each other in a timely manner.
France and Germany Are Europe’s main losers of tax evasion. The German government refuses to do its job by practically not making use of the possibility of group requests to tax havens. It is likely that other EU countries are not doing any better. European and international law made it possible to determine the names of tax evaders since a long time, but the German government has left one of the most effective instruments against tax evasion unused. Finance minister Scholz and the finance ministers of the Länder could dry up tax swamps to some extent, but they are not doing so. Justice is trampled underfoot if billions are not recovered from tax havens”.
Study by the European Commission on the estimation of international tax evasion by natural persons:
https://ec.europa.eu/taxation_customs/sites/taxation/files/2019-taxation-papers-76.pdf
Study by the Greens/EFA Group in the European Parliament according to which German tax authorities lose up to 15 billion euros in tax revenue each year due to untrammelled tax evasion:
https://sven-giegold.de/wp-content/uploads/2019/09/Steuerhinterzieher-konsequent-verfolgen.pdf