Parliament: Recommendations to fight tax abuse and money laundering

Parliament: Recommendations to fight tax abuse and money laundering


Following months of work, MEPs on Tuesday adopted a comprehensive set of recommendations stemming from the lessons learnt from the Pandora papers and other similar data leaks.

The report, authored by Niels Fuglsang (S&D, DK) and adopted by Parliament’s economic and monetary affairs committee by 46 votes in favour and 7 abstentions, calls for continued momentum to enact proposed legislation, more commitment to correctly implement and enforce what has already been agreed, and makes suggestions for a host of new reforms considered essential.

After the vote Mr Fuglsang said, “It has been my primary goal during negotiations to push for real commitment and concrete tools in our fight against tax evasion in the EU.

I am particularly proud about our agreement on taxation of capital gains and limiting harmful tax practices aimed at attracting foreign-earned income, wealth and assets. This is the first time we state such a clear call on the Commission and Members States to act on these areas, and therefore this is an important step towards strengthened tax fairness.

Moreover, for the first time we are addressing the potential issues of tax regimes designed to attract digitals nomads as well as foreign-earned income or wealth which, according to the researchers, are harmful to varying degrees.”

Main recommendations

The report makes recommendations on protecting journalists and whistle-blowers, reducing conflicts of interest, better regulating intermediaries, improving reporting and information sharing, particularly on beneficial ownership, better addressing practices that can harm tax collection such as through the use of crypto-assets, golden passports or certain real estate transactions.

Equally importantly, the report takes aim at tax regimes designed to attract foreign nationals and calls for these regimes to be assessed. It also calls on the Commission to assess the possibility of a minimum tax on capital gains at EU level. An EU version of the UK’s system to investigate unexplained wealth should also be considered, the report says.

Similarly to other previously adopted resolutions, the adopted text again criticises the system in place for the elaboration of the EU’s tax haven black list and goes into some detail of how it should be reformed. The report also calls on the Council to reassess the United States in the framework of the EU list, arguing that the US presents shortcomings, particularly regarding the tax transparency criteria.

In October 2021, the International Consortium of Investigative Journalists published a massive data leak, which once again shed light on the role of tax havens, intermediaries and the use of shell companies by individuals to evade taxes. Since then, the tax subcommittee organised a series of hearings to address these topics. These include a public hearing on ‘Tax avoidance and evasion in the Pandora Papers’ in November 2021, a hearing on jurisdictions appearing prominently in the Pandora Papers in March 2022 and a hearing on regulating intermediaries in April 2022. Further to these hearings, various MEP delegation visits to European countries also contributed to the findings and recommendations adopted today.

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