European Parliament’s Committee on financial crimes, tax evasion and tax avoidance (TAX3) held a workshop on 7 June which examined taxation and tax evasion in relation to the topics of 1) virtual currencies, 2) taxation of the digital economy and 3) national aggressive tax planning practices as highlighted in the Commission European Semester reports.
- During the first panel, Professor Houben of Antwerp University recommended that Parliament consider widening definitions of money laundering and implementing targeted bans to address anonymous crypto currency transactions, which his research has concluded leads to increased tax evasion. However, Professor Houben also stressed solutions to tax evasion issues involving crypto currencies ought to be addressed and agreed at international level.
- Professor Vella of Oxford University, discussing digital taxation in the second panel, opined that the international taxation system is at a critical stage, but that digitalisation was not the source of the problem. Professor Vella opined that mobile factors from the internationalisation of business have led to profit shifting and distortion of economic reality, issues which are best addressed by taxing companies where their value creating immobile factors are located.
- Valère Moutarlier, EU Commission’s Direct Tax Director, attended the third panel on behalf of the Commission to discuss the European Semester Reports. Mr Moutarlier stressed that the reports were based on impartial economic evidence which indicated aggressive tax planning, so the Commission could target issues on the basis of this data which were not being addressed at national level. Mr Moutarlier stated that there had been stronger dialogue with the Member States identified in the reports, and that progress was being made. He noted it was hoped the dialogue created by the reports would generate further political momentum for tax policy reform.
The TAX3 Committee’s draft final report which will cover the above issues will be available on 9 November 2018.