Debate: Lessons learnt from the Pandora Papers and other revelations
Date: WEDNESDAY, 14 JUNE 2023
Speaker: Didier Reynders
Language: EN

As you rightly note, such revelations demonstrate the crucial role investigative journalists play in exposing tax evasion, corruption, organised crime and money laundering. They also illustrate that fighting tax evasion and tax avoidance is a constant struggle. We need to keep on improving the legislation and tighten our net. Rest assured that it is a top priority for the Commission. As you know, we proposed at the end of 2022 a new amendment to the Directive on Administrative Cooperation to include the reporting and automatic exchange of tax information on transactions in crypto-assets and e-money, strengthening the current Directive and covering aspects that are necessary to ensure its correct functioning. Moreover, we are currently working towards agreement in Council on the key initiative to fight the misuse of shell entities for improper tax purposes. The ‘unshell’ proposal will ensure that entities in the EU without a minimum degree of economic substance are unable to benefit from any tax advantages and do not place any financial burden on taxpayers. The Commission would like to thank you once again for your strong support and constructive suggestions on this proposal. This Commission and Parliament are allies in promoting standards of tax fairness and transparency further, within the European Union and beyond. Your continuous support on ‘unshell’ is precious, and the Commission hopes you will continue to push for an agreement on an ambitious compromise by the Council. Of course, the use of shell companies also has an external dimension, one we have committed to tackling as well. We want to offer to Member States additional tools to tackle tax arrangements or schemes in non-EU countries that lead to tax evasion or aggressive tax planning. In order to take these further steps, it is therefore even more important that the Member States prove themselves capable of reaching an agreement on the proposed directive on preventing shell companies with the European Union. Your report points to the growing challenges in the area of non-corporate tax regime. The Code of Conduct Group has been working intensively to strengthen the EU listing process over the last few months, and we have a common interest to advance certain areas of work. In particular, the Group focuses on the revision of the EU listing criteria and is considering a more robust approach to zero-tax jurisdictions. However, more remains to be done regarding information on beneficial ownership or the extension of the geographical scope of the EU list. We also agree with your suggestion to expand the mandate of the Code of Conduct to personal and capital income taxation. Now we need to convince the Member States to support a further strengthening of the EU listing process. But our actions do not stop here. In your report, you rightfully discuss the role that intermediaries play in facilitating tax avoidance and evasion. The Commission is adopting an additional proposal which will reinforce our arsenal against fraudulent tax practices. Our objective with it is two-fold: making withholding tax procedures more efficient and ensuring that the current initiative includes all necessary safeguards to prevent fraudulent refunds and abusive tax schemes. Finally, as you know, the Commission is working on BEFIT, Business in Europe: Framework for Income Taxation, a new corporate tax system for the European Union. This is a flagship of our new ambitious business tax agenda, reflecting some of the very priorities included in the report we are discussing here today. I want to thank the rapporteur and all the members involved for their valuable work. And now, of course, I will listen to your interventions and proposals.