Communication from the Commission to the European Parliament and the Council on concrete ways to reinforce the fight against tax fraud and tax evasion including in relation to third countries

Tax fraud and tax evasion are limiting the capacity of Member States to raise revenues and to carry out their economic policy. In times of fiscal consolidation, when many Member States need to cut expenditure and increase revenues, the conduct of fiscal policy is made even more difficult by tax fraud and evasion. Estimates of the size of the shadow economy in the EU, of nearly one fifth of GDP, gives a first indication of the extent of the problem.

In recent years, the challenge posed by tax fraud and evasion has increased considerably. The globalisation of the economy, technological developments, the internationalisation of fraud, and the resulting interdependence of Member States' tax authorities reveal the limits of strictly national approaches and reinforce the need for joint action. On 2 March 2012, the European Council therefore 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.

This Communication outlines 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 identifies areas where further legislative action or coordination would benefit the EU and Member States. Such action should not only target fraudulent activity and tax evasion but also aggressive tax planning. Aggressive tax planning includes the use of artificial operations or structures and the exploitation of mismatches between tax systems with the effect of undermining Member States' tax rules and exacerbating the loss of tax revenues.

EUR-Lex: COM(2012)351: Follow the progress of this document through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2012:351:FIN

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