Dear friends and all those who are interested,
On Wednesday, 19 May, the European Parliament unanimously supported providing more money and resources to ensure greater cross-border cooperation between tax authorities going forward. This is a strong signal in support of increasing cooperation between national tax authorities in Europe and beyond. As rapporteur, I have closely followed the work on the new Fiscalis programme since 2018 and together with my pro-European colleagues in the Parliament, we were able to further improve the programme in key areas. The continuation of the Fiscalis programme makes an important contribution to the effective work of our tax authorities and thus to greater tax justice in Europe. I would like to share this green success with you. For this purpose, I have written down the most important background information and achievements of the Parliament:
There are basically two ways to tackle tax injustice, both are important. One is the reform of tax rules, such as the plans for the reform of business taxation in Europe, which the Commission presented this week. The other is the uniform enforcement of existing tax law. Unfortunately, we still have many cases of aggressive tax avoidance, tax evasion and tax fraud in the internal market. To date, our tax authorities are national, but the internal market is European and tax relations are often international. That is why it is so important that tax authorities in Europe can work closely together to effectively combat tax fraud, tax evasion and aggressive tax avoidance.
Since 1993, the EU has had a specific programme to promote cooperation between tax authorities. The new Fiscalis programme ensures the continuation and deepening of these existing cooperation opportunities until 2027, under the next Multiannual Financial Framework. For the next seven years, 269 million euros will be available for this purpose: mainly to invest in common IT systems, training and cross-border cooperation of tax investigators, as well as for the exchange of best practices in this area. In the period 2014 – 2020, 223.2 million euros were allocated from the EU budget to the Fiscalis programme. Considering that the UK has now unfortunately left the EU, this is a significant increase in funding compared to the previous seven years.
Thanks to the Fiscalis programme, significant additional revenues have been raised. According to the Commission, in 2015 alone, for example, 591 million euros in unpaid taxes were identified to be recovered thanks to this programme. This means that, thanks to Fisclais, in one year we take in twice as much as the entire programme costs over seven years. This shows how sensible it is to invest in common IT systems. It is simply cheaper to develop joint IT solutions for the Europe-wide exchange of tax-relevant data instead of each country developing its own systems for bilateral exchanges. In addition, it is also good for companies in Europe if they can check, for example, in the “VAT Information Exchange System” whether their business partners in other countries are actually properly registered for VAT. This helps in the fight against VAT fraud, which causes significant tax revenue losses for Member States every year. Enforcing VAT rules is important, especially since it has not been possible for the past 20 years to find an agreement on VAT reform at EU level. Improving joint IT systems for tax purposes is also important for the automatic exchange of information between tax authorities, as provided for in the European Directive on Administrative Cooperation in Tax Matters. Parliament has worked intensively on the implementation of this directive in another report and unfortunately had to conclude that there are still problems with the implementation of the regulation – so we will have to keep working here.
As rapporteur for the Fiscalis programme, I played a leading role in the negotiations with the Council and the Commission. We were able to further improve the Commission’s good proposal on key issues. Here are the most important successes:
- The new programme sets out clear priorities on where cooperation should be directed at – namely precisely on combating aggressive tax avoidance, tax evasion and tax fraud with a list of concrete objectives.
- We emphasised the importance of joint audits, which take place across national borders and are significantly more effective than just exchanging information. For here, there was a threat of a lack of funding.
- We also ensured that representatives of tax authorities from developing countries could participate in this programme.
- What was particularly important to me, and what we have now also achieved in this joint resolution, is that there are annual progress reports in which it is also explained which deficits have been uncovered through the programme. This helps us to subsequently improve the legislation and creates public pressure.
- Furthermore, we were able to achieve that the experts in the framework of this programme are not allowed to have any conflicts of interest. Just as it is – or at least should be – the standard for the involvement of experts in other European programmes.
- Finally, in the last phase of the legislative process, we were able to ensure that there is an annual meeting between the MEPs and the Council. The aim is to discuss progress but also existing deficits in order to continuously improve cooperation in tax matters. The commitment to these annual meetings with the European Parliament is an important step towards giving us elected representatives a greater say in tax matters in the future. I have been campaigning for this for a long time. Such direct talks are new territory in the field of fiscal policy.
As no amendments and no opposition were tabled in the run-up to the plenary debate, the new Fiscalis programme was declared adopted Wednesday night (19 May). The European Parliament thus unanimously supports the deepening of cooperation in tax matters, so that no final vote was necessary. I would like to thank all colleagues, the Council and the Commission for the progress we have made in the area of tax cooperation. I would also like to thank the Commissioner for Economic Affairs, Paolo Gentiloni, who promised during the plenary debate that his department would initiate infringement proceedings against Member States if they substantially violate European rules on cooperation between tax authorities. I will insist that he keeps this promise and will soon present him with a corresponding, sad list of examples. Especially considering the Conona crisis and in view of the dramatic increase in inequality, we can really no longer afford rampant tax fraud, tax evasion and aggressive tax avoidance.
With green European greetings,
Council statement agreeing to annual meetings with Members of the European Parliament: “The Council notes the interest of the Parliament for more transparency concerning the implementation of EU legislation in the field of fighting against tax fraud, tax evasion and tax avoidance. Within the context of the Treaties’ legal framework ruling interinstitutional relations, the Council recognises the added value of holding annual exchanges of views with the European Parliament and the Commission on the lessons learnt from the Fiscalis Programme, based on the Commission’s annual progress reports.”
More information on the recommendation for second reading (including vote in the ECON Committee on 17 May): https://www.europarl.europa.eu/doceo/document/A-9-2021-0167_EN.html#title2
All documents related to this legislative process here: https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?lang=en&reference=2018/0233(COD)
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