The European Commission has launched a public consultation on whether there should be concerted EU action to tackle advisers and intermediaries, including accountants, who facilitate tax evasion and tax avoidance using aggressive tax planning schemes, in the light of information revealed in the Panama Papers
The Commission stated: ‘Recent revelations have highlighted how certain intermediaries, such as tax advisers, helped their clients to shift profits offshore for the purposes of avoiding tax. While some complex transactions and the setting up of off-shore companies may be entirely justifiable, it is also clear that other activities may be less legitimate and in some cases illegal.’
In its introduction to the online survey set up for feedback, the Commission said that the most recent measures adopted in the EU aim to ensure that corporate taxpayers operating cross border do not benefit from the loopholes or mismatches arising from the application of the different tax legislations of multiple jurisdictions. However, little has so far been done to introduce disincentives for those intermediaries that help, assist or advise taxpayers in the design of structures to facilitate tax evasion or avoidance.
Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs union said: 'Complex financial schemes and opaque corporate structures do not happen by accident: some intermediaries have developed these into an art-form.
‘These experts offer their clients the opportunity to aggressively exploit loopholes or to shift their profits so as to substantially reduce their tax bill.
‘The public consultation we're launching today will help us to work out ways to deter intermediaries from designing such schemes and to give our member states greater insight and information to enable them to put a stop to them.’
The consultation will examine whether it is appropriate to introduce binding rules at the EU level to introduce more effective deterrents for tax advisers engaged in operations that facilitate tax evasion and tax avoidance and, if so, what the most legal suitable legal instrument should be.
In particular, the Commission say it is interested in gathering views on how a mandatory disclosure scheme for tax advisers could be put in place. Such rules would oblige intermediaries to give early information on schemes which could be viewed as aggressive or abusive planning for tax purposes and would reflect the goals of the OECD's non-binding guidelines set out in action 12 of the Base Erosion and Profit Shifting (BEPS) project for the disclosure of aggressive tax planning strategies.
In the UK, HMRC has already run a consultation on plans for new penalties for accountants and others who enable tax avoidance, which closed on 12 October, but has yet to publish details of how it will take proposals forward.
The EU public consultation will run until 16 February.
