The decision was taken by EU Economic and Financial Affairs ministers at their meeting in Brussels this morning. First proposed by the Commission in June 2017, the new measures build on a multitude of ambitious rules to fight tax avoidance and to boost tax transparency already agreed at EU level under the Juncker Commission.

Once in force, tax intermediaries who provide their clients with complex cross‑border financial schemes that could help avoid tax will be obliged to report these structures to their tax authorities. In turn, EU Member States will exchange this information with each other, further increasing scrutiny around the activities of tax planners and advisers.

Following the agreement, Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “The new rules agreed today confirm the EU as the world leader in tax transparency. In future, intermediaries will have to share with tax administrations the schemes they sell to their clients. Tax administrations will then have access to the information they need to put an end to the aggressive tax planning schemes eroding their tax bases. This agreement is a further step towards more openness and better cooperation, facilitating fairer and more effective taxation throughout the EU.” 

Recent media leaks such as the Panama and Paradise Papers have exposed how some intermediaries actively assist companies and individuals to escape taxation, usually through complex cross-border schemes.

Cross-border tax planning schemes can bear certain characteristics – or ‘hallmarks’ – that indicate a risk of tax avoidance or evasion. Such hallmarks can include the use of cross-border losses to reduce tax liability, the use of special preferential tax regimes, or arrangements through countries that do not meet international good governance standards. Intermediaries that design or provide schemes bearing any one of these key hallmarks will now have to report these schemes to the tax authorities before they are used.

Member States will automatically exchange the information that they receive on the tax planning schemes through a centralised database, giving them early warning on new risks of avoidance and enabling them to take measures to block harmful arrangements and carry out audits more effectively. The requirement to report a scheme does not necessarily imply that it is harmful, only that it merits scrutiny by the tax authorities. But Member States have also agreed to implement effective and dissuasive penalties for those companies that do not comply with the transparency measures, creating a powerful new deterrent for those that encourage or facilitate tax abuse.

Next Steps

The new reporting requirements will enter into force on 1 July 2020, with EU Member States obliged to exchange information every 3 months after that. The first exchange willl take place by 31st October 2020.

For More Information

Q&A on new transparency rules for intermediaries

Factsheet

DG TAXUD webpage on the new rules for tax intermediaries

Video on new rules for tax intermediaries

Monsieur le Président, re-bonjour.

Mesdames et Messieurs les députés,

Just under two weeks ago I returned from a tour around the Western Balkans. It was a memorable trip for many reasons.

What struck me the most was the passion and conviction in the European Union. This gave me a renewed sense of belief and hope: that if a region, a dramatic region like the Western Balkans is so determined to reform from top to bottom in order to join our Union, then we must be a Union worth being part of. The Western Balkans clearly see much more in us than we ourselves see in our Union. I want to see this same belief in our Union across all 27 Member States.

Of course there is a great deal of work to be done. All bilateral conflicts must be resolved and more unity is needed. Each of the Western Balkan partners must continue their reform path, especially when it comes to the rule of law and fundamental freedoms and values.

As I said to all leaders in the region, there will be no fast-tracking. We will put substance over speed. Each case will be taken on its own merits with no fixed dates or firm deadlines.

But I came back from the trip more convinced than ever that this is our shared future. It is about reconciling our history and geography.

But it is also a reason more to focus on building a stronger, more democratic and united Union.

This is what the March European Council is about.

I would like to thank this House and the Bulgarian Presidency for leading the way in recent weeks. The breakthrough on posted workers will ensure that fairness comes first in our labour market. As we collectively agreed: equal pay for equal work in the same place. The agreement on 5G shows we are serious about our digital leadership and equipping ourselves with the tools we need to thrive in the society of tomorrow.

Mr President,

Europe believes in open and fair trade, based on a global rulebook. Our economy depends on it, our consumers expect it. But as I have said all along: we are not naïve free traders.

So we will not sit idly by if our industry is hit with unfair trade measures that put European jobs at risk. We will defend our workers, we will defend our industry, and we will do so respecting the rules that the world agreed to under WTO.

The United States has regrettably decided to impose restrictions on steel and aluminium which will impact a significant amount of EU trade. We believe in win-win trade, but going it alone on tariffs is a lose-lose for all.

Yes, the global steel industry has an over-capacity problem. This is why since December, along with Japan and the U.S., we have been looking at how to address this issue globally.

Commissioner Malmström met with both of her counterparts this weekend to deepen that cooperation further. And she also expressed our concerns to the United States on the tariffs they imposed on national security grounds.

Exports from the European Union are clearly not a threat to the United States’ national security. We are long-standing and trusted security partners and we work together to keep each other safe and secure. And as their own figures show, the U.S. only needs 3% of its annual steel production to serve the Pentagon’s needs.

We will keep making this point in the run-up to the European Council next week. We are expecting more clarity from the American side in the coming days and we will continue to work with our partners to push for an exemption to these measures.

But as always we will – and we have to – prepare for all eventualities.

Should the need arise, the European Union will respond in three ways.

First, under WTO rules we have the right to rebalance these measures, and we stand ready to do so.

Secondly, we will be ready with safeguard measures if there is a surge in imports into the European Union as a result of the U.S. closing its market.

Thirdly, we will seek dispute settlement consultations in the WTO, in conjunction with other affected countries.

Herr Präsident, meine sehr verehrten Damen und Herren,

wenn wir unserer Union mehr Stärke, mehr Handlungsfähigkeit verleihen wollen, müssen wir auch in die Architektur unserer Wirtschafts- und Währungsunion investieren und sie zukunftsfester machen. Die Umstände dafür sind so günstig wie selten zuvor.

Die europäische Wirtschaft wächst über Erwarten, in den vergangenen zwei Jahren mit mehr als 2 Prozent, und sie wächst schneller als die US-amerikanische Wirtschaft. Gleichzeitig haben wir in Europa mehr Menschen in Arbeit als jemals zuvor: 236.3 Millionen – ein neuer Rekord.

Das sollte uns Bestätigung und Ansporn zugleich sein, unseren Reformkurs konsequent fortzusetzen, und genau das tun wir. So legt die Kommission heute, am frühen Nachmittag, ein Paket zur Bankenunion vor. Es geht darum, die Finanzstabilität zu sichern, indem wir uns noch stärker mit notleidenden Krediten beschäftigen. Dort haben wir schon einige Erfolge erzielt.

Seit 2014 ist der durchschnittliche Anteil notleidender Kredite in der EU schon um ein Drittel gesunken. Dabei wollen wir es nicht belassen. Das ist umso wichtiger, weil bei der Vollendung der Bankenunion Risiko-Minderung und Risikoteilung Hand in Hand gehen.

Eine vollendete Bankenunion wäre ein wichtiger Schritt, um unsere Wirtschafts- und Währungsunion zu stärken. Genau darum geht es beim Gipfel. Über die Vorschläge, die die Kommission im Dezember vorgelegt hat, haben wir hier im Hause und bei einem früheren Eurogipfel schon diskutiert. Wir wollen den Europäischen Stabilitätsmechanismus schrittweise zu einem Europäischen Währungsfonds ausbauen. Außerdem wollen wir die Mitgliedsländer und solche, die es werden wollen, bei den Reformen unterstützen sowie mit einer Stabilisierungsfunktion sicherstellen, dass selbst im Falle von schweren Schocks Investitionen in Bildung und Infrastruktur weiterhin gewährleitstet bleiben.

Monsieur le Président, Mesdames et Messieurs, chers collègues,

Compléter l’Union économique et monétaire n’est pas une fin en soi. C’est un moyen de créer les conditions d’une vie meilleure, d’une vie plus prospère et plus équitable pour tous nos concitoyens.

Egalité des chances, conditions de travail équitables, protection et insertion sociales doivent devenir une réalité pour tous. C’est pour cela que nous nous sommes engagés à mettre en œuvre le Socle européen des droits sociaux.

16 millions de nos concitoyens, par exemple, vivent et travaillent dans un autre Etat membre que le leur. C’est deux fois plus qu’il y a dix ans et ce phénomène ne fera que s’amplifier. Ces personnes ont, comme tout à chacun, des droits qui doivent être respectés et effectivement mis en œuvre dans un marché européen du travail.

C’est la raison pour laquelle la Commission va présenter aujourd’hui sa proposition de création d’une Autorité européenne du travail qui ne viendra pas se substituer aux autorités nationales mais qui renforcera la coopération et la coordination entre elles.

Ceux qui travaillent à temps partiel, ceux qui relèvent du statut des travailleurs intérimaires, ont eux aussi droit à une protection sociale convenable. C’est une responsabilité commune, celle de mettre en œuvre le Socle des droits sociaux.

Il faut évidemment continuer à parfaire le marché intérieur, notamment les marchés de l’électricité qui, en Europe, s’ils étaient totalement interconnectés, les Européens permettraient aux Européens de réaliser des économies de 40 milliards d’euros par année. Si l’Europe numérique fonctionnait, cela nous apporterait 415 milliards d’euros de croissance nouvelle chaque année. Donc rien que sur l’interconnectivité de l’électricité et de la mise en place totale de l’Europe numérique, nous réaliserions un bénéfice – si je peux m’exprimer de la sorte – de 450 milliards d’euros.

Nous avons tous, je crois, conscience qu’il serait essentiel, souhaitable, bienvenu que nous puissions mettre en œuvre tous les éléments dont je viens de vous parler d’ici les élections européennes de l’année prochaine.

The EU’s list of non-cooperative jurisdictions in taxation matters has been adjusted in the light of:

• commitments made by listed jurisdictions;
• an assessment of jurisdictions for which no listing decision had yet been taken.

Moves have also been made to improve transparency in the listing process.

On 13 March 2018, the Council removed Bahrain, the Marshall Islands and Saint Lucia from the list and added the Bahamas, Saint Kitts and Nevis and the US Virgin Islands.

The EU’s list is intended to promote good governance in taxation worldwide, maximising efforts to prevent tax avoidance, tax fraud and tax evasion. It was prepared during 2017 in parallel with work within the OECD.

“I am glad to see more jurisdictions that we listed in December committing themselves to reforming their tax policies in a manner that will remedy our concerns”, said Vladislav Goranov, minister for finance of Bulgaria, which currently holds the Council presidency. “We call on all jurisdictions on the list to do likewise, and on all those that have already made commitments to implement them in a timely manner. Our aim is to achieve optimal tax transparency worldwide”, he said.

Three jurisdictions removed

The EU list is contained in annex I of conclusions issued by the Council on 5 December 2017. Annex II cites a number of other jurisdictions that have undertaken commitments to reform their tax policies and which are subject to close monitoring.

Since the list was first published on 5 December 2017, Bahrain, the Marshall Islands and Saint Lucia have made commitments at a high political level to remedy EU concerns. In the light of an expert assessment of those commitments, the Council decided to move the three jurisdictions from annex I to annex II.

Implementation of their commitments will be carefully monitored.

Three jurisdictions added

When it first published the list, the Council agreed to put on hold a screening of the tax systems of Caribbean jurisdictions that were struck by hurricanes in September 2017. The process was restarted in January 2018, when letters were sent requesting commitments to remedy EU concerns. The Bahamas, Saint Kitts and Nevis and the US Virgin Islands are added to the list (annex I) as a result of that process. This is because they have failed to make commitments at a high political level in response to all of the EU’s concerns.

At the same time, the Council decided to add Anguilla, Antigua and Barbuda, the British Virgin Islands and Dominica to annex II. This was justified by commitments made to address deficiencies identified by the EU. Those commitments were assessed by EU experts, and their implementation will be carefully monitored.

The process continues with regard to an eighth Caribbean jurisdiction, the Turks and Caicos Islands, from which a commitment at a high political level is being sought by 31 March 2018 to address EU concerns.

Transparency

Since the list was first published in December 2017, moves have been made to boost transparency.

Public information on the commitments made by third country jurisdictions was initially limited to the contents of annexes I and II. However, in February 2018 the working group responsible for the listing process (the ‘code of conduct group’) asked for all of its letters seeking commitments to be published on the Council’s website. On 6 March, a compilation of those letters was issued as a public document.

Moreover, commitments letters received from third country jurisdictions are being made public as soon as consent for publication is secured. And a specific Council webpage on the EU list is being prepared.

Nine jurisdictions remain

The decisions of 13 March 2018 were taken at a meeting of the Economic and Financial Affairs Council, without discussion.

As a result, 9 jurisdictions remain on the EU list: American Samoa, Bahamas, Guam, Namibia, Palau, Samoa, Saint Kitts and Nevis, Trinidad and Tobago and the US Virgin Islands.

These include 6 of the original 17, plus three of the Caribbean jurisdictions. (Eight of the original 17 were delisted on 23 January 2018.)

Whereas the list is to be revised at least once a year, the ‘code of conduct group’ can recommend an update at any time.

Jurisdictions that remain on the list are strongly encouraged to make the changes requested of them. Their tax legislation, policies and administrative practices result or may result in a loss of revenues for the EU’s member states. Pending commitments to make such changes, the EU and the member states could apply defensive measures. Annex I includes recommendations on steps to take to be delisted.

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