Introducing the new measures Pierre Moscovici, European Commissioner for economic and financial Affairs, taxation and customs, said: ‘The "Panama Papers" revealed that, despite recent progress on tax transparency, tax evaders can still hide behind opaque offshore companies and trusts to escape taxation.

‘They also highlighted the central role that tax advisors – including law firms and financial institutions – play in facilitating tax evasion and avoidance. And they confirmed that there are still countries around the world that encourage tax evasion and avoidance – either deliberately or through weaknesses in their good governance structures.’

Moscovici outlined proposals for a new initiative for the automatic exchange of beneficial ownership information between tax authorities across Europe. The Commission is also proposing that tax authorities should have access to national anti-money laundering information, particularly beneficial ownership and due diligence information.

Member States will make public certain information of the beneficial ownership registers on companies and business-related trusts. Information on all other trusts will be included in the national registers and available to parties who can show a legitimate interest. The beneficial owners who have 10% ownership in certain companies that present a risk of being used for money laundering and tax evasion will be included in the registries. The threshold remains at 25% for all other companies.

The proposal provides for the direct interconnection of the registers to facilitate cooperation between member states.

In addition, the existing anti money laundering directive will be amended so that existing, as well as new, accounts are subject to due diligence controls. Passive companies and trusts, such as those highlighted in the Panama Papers, will also be subject to greater scrutiny and tighter rules.

The Commission said it was evident that certain tax advisors and financial intermediaries have played a central role in facilitating tax evasion, and its plans include creating effective disincentives for those that promote and enable aggressive tax planning. There is to be a public consultation by the autumn to gather feedback on the issue.

Moscovici said: ‘In addition, there will also be an EU list of non-cooperative tax jurisdictions – let's call it as it is, tax havens, as I announced at the beginning of the year. This common EU tax list will be an extremely effective way of putting pressure on countries that do not play fair in the global tax arena and of dealing with third countries that refuse to respect good governance standards.

There will be a three-step process to compile the EU list. In the pre-analysis phase the Commission will do a pre-assessment of all third countries, based on economic indicators. The results will be presented in a scoreboard, to identify the most relevant tax jurisdictions for screening.

Next, the selected third countries will be screened against clearly defined good governance criteria. In the final phase member states will decide which countries to list, based on the outcome of the screening process.

The Commission is currently working to identify the most relevant countries to screen under this process, in order to have a first EU list ready in 2017. Finally, the Commission indicated it also intends to strengthen protection for whistle-blowers.

Terrorist financing

As well as plans to boost tax transparency, the Commission is proposing changes to prevent the financial system from being used for funding terrorist activities. These include widening the scope of information accessible by the EU financial intelligence units so they have access to information in centralised bank and payment account registers and central data retrieval systems, which member states will have to establish to identify holders of bank and payment accounts.

Virtual currency exchange platforms and custodian wallet providers will be brought into the scope of the anti-money laundering directive, and will be required to apply customer due diligence controls when exchanging virtual for real currencies, ending the anonymity associated with such exchanges.

In addition, to counteract the use of anonymous payments through pre-paid cards, the thresholds for identification will be lowered from €250 to €150 and there will be tighter customer verification requirements. Banks will have to carry out additional checks on financial flows from countries which the Commission has identified as having deficiencies in their anti-money laundering and countering terrorist financing regimes.

Chas Roy-Chowdhury, head of taxation at ACCA, indicated strong support for the latest measures, saying the association was ‘in favour of ensuring stringent and uniform rules across the EU and in countries doing business with the EU, including sanctions such as taking back assets and stiff prison sentencing regimes.’

'In particular, we are pleased to see proposals to widen the scope of the information accessible to Financial Intelligence Units, whose role is crucial, as well as their steady cooperation. We also share the Commission’s view that, in our digitalised era, it is necessary and urgent to introduce due diligence requirements for the exchange of virtual currencies, such as bit coin, and to strengthen the verifications and controls on pre-paid instruments such as prepaid cards. These are important in tackling black market and terrorist financing,’ he said.

Details of the directive are here.