On 27 February, the European Parliament’s Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance, “TAX3”, voted, by a majority of 34 votes to 4, with 3 abstentions, its draft report. The report presents the recommendations of the Committeefollowing ten months of hearings concerning anti-money laundering and aggressive tax planning.
The report recommends that Commission and Council adopt a comprehensive definition of aggressive tax planning, as well as a definition of permanent establishment, economic activity requirements and expenditure tests to avoid companies having an artificial taxable presence in a Member State.
Additional recommendations include that an EU anti-money laundering watchdog ought to be established, the Commission ought to propose that a European financial police force be established, that golden visas ought to be phased out and that whistleblowers need to be provided with better protection. An amendment which recommends imposing a mandatory rotation for auditors after 7 years of service was also approved. A finding to include in the report that Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta and The Netherlands all display traits of a tax haven and facilitate aggressive tax planning was also approved.
Chair of the committee, Petr Ježek, said of the voted report: “The considerable amount of work achieved by this committee over its twelve-month mandate has shed light on unprecedented issues affecting the banking and financial sectors. The investigations and hearings have helped us draft stronger recommendations, notably on the need to enforce EU AML/CFT legislation better, stricter banking supervision, and enhanced information exchange among FIUs and tax authorities. It is now crucial to maintain pressure for the implementation of our recommendations to the governments and the relevant actors.”
The report will now be voted by the European Parliament Plenary in the second sitting in Strasbourg between 25 – 28 March.