On 2nd March 2012, the European Council called on the Council and the Commission to rapidly develop concrete ways to improve the fight against tax fraud and tax evasion, including in relation to third countries and to report by June 2012. In April the European Parliament adopted a resolution echoing the urgent need for action in this area.
As a first response, on 27 June 2012 the Commission adopted a Communication[1] (the "June Communication") which outlined how tax compliance can be improved and fraud and evasion reduced, through a better use of existing instruments and the adoption of pending Commission proposals. It also identified areas where further legislative action or coordination would benefit the EU and Member States and demonstrated the added value of working together against the increasing challenge posed by tax fraud and evasion.
The June Communication announced the preparation, before the end of 2012, of an action plan setting out concrete steps to enhance administrative cooperation and to support the development of the existing good governance policy, the wider issues of interaction with tax havens and of tackling aggressive tax planning and other aspects, including tax-related crimes.
The Commission is presenting in this action plan, the initiatives the Commission has already taken, new initiatives that can be progressed this year, initiatives planned for next year and those requiring a longer timeframe. In sequencing these initiatives, the Commission was mindful of the need not to overload Member States and to take account of their capacity to take the necessary actions.
In essence, this action plan contains practical actions which can deliver concrete results to all Member States and lend support in particular to those Member States to whom Country Specific Recommendations[2] on the need to strengthen tax collection have been addressed, in the context of the 2012 European Semester exercise.
Member States and stakeholders were consulted on the contents of the action plan and priorities to be given to each item. The plan takes into account their views. The strong message from Member States was that top priority should be be given to actions already under development and to the full implementation and application of the newly adopted legislation on administrative cooperation and the fight against tax fraud. Member States also emphasised the need to adopt quickly the pending proposals in the Council and to pay particular attention to the fight against VAT fraud and evasion[3] [4].
Future work on these actions will be guided by the need to reduce costs and complexity of tax systems for both the taxpayers and the tax administrations. For taxpayers, decreasing costs and complexity would encourage better tax compliance. For tax administrations, the development and full use of automated tools and risk management techniques would release human and budgetary resources to concentrate on achieving targeted objectives.
The Commission will also continue to promote the most effective use by all Member States of practical IT tools for all taxes. It will also promote a more joined-up approach between direct and indirect taxes and between taxation and customs by making appropriate use of the FISCALIS and CUSTOMS programmes to enhance communication and promote a more systematic sharing of best practices and tools, where appropriate. This can help to improve the efficiency of audits and controls and reduce the burden on taxpayers.
All the actions proposed to be taken up by the Commission in this document are consistent and compatible with the current Multiannual Financial Framework 2007-2013 and the new Multiannual Financial Framework 2014-2020.
