euro|topics - The EU harshens its tone against tax evasion

Main focus of Wednesday, March 5, 2008

The EU harshens its tone against tax evasion

Following the massive Liechtenstein tax evasion scandal recently revealed by the German justice system, the EU's finance ministers gathered in Brussels on Tuesday, March 4th, to examine European legislation on the subject. While they remain divided over banking secrecy, the European countries agreed on the necessity to reinforce the means of fighting tax evasion.

Süddeutsche Zeitung - Germany

Hans Leyendecker expresses the view that a tough discussion about banking secrecy needs to be conducted at a Europe-wide level, because it's not just about envy but about the rule of law. "Each country makes its own laws, and its own fiscal laws, too. However, countries like Liechtenstein and Switzerland that regard tax evasion as mere infringements to be punished at most with fines, but otherwise hide behind the banking secrecy regulations and refuse to aid law enforcement, are guilty of aiding and abetting tax fraud. They make their own decisions about whether to regard an offence committed in Germany as criminal or not. The 'we'll hide your money from the tax authorities' business model is a brutal policy that serves special interests. ... Switzerland's banking secrecy laws were tightened in 1934 to allow the country to avoid having to pass on information about Jewish accounts to the Nazi authorities. That was the right move back then, but today banking secrecy regulations need to be relaxed for the sake of justice." (05/03/2008)

La Tribune - France

Pascal Auber highlights the difficulties involved in modifying current rules. "Despite the emotion provoked all over Europe by the revelations on the list of Liechtenstein's fiscal tourists, a lot of money will continue to flow under the bridges of tax havens before fraud is eliminated for good. Firstly, this is because low-tax or no-tax financial zones have become an indispensable cog in our globalised economy. A very difficult international consensus would be necessary to deal with it. Then, though Germany's anger against the Alpine principality allowed the reopening Europe's fiscal hernia file, any reinforcement of current rules would require a unanimous decision on the part of the 27 members for one thing, which isn't easy, as well as the co-operation of tax-havens that are thriving on the fringes of Europe, Switzerland for starters." (05/03/2008)

La Libre Belgique - Belgium

Ariane van Caloen stresses the fact that "this scandal is showing up what is lacking in fiscal guidelines for savings capital ... . The 2005 text stipulates the exchange of information between member states on the savings revenue of non-residents. But EU countries that practice banking secrecy (Belgium, Luxembourg, Austria), as well as European tax havens beyond the EU, such a Liechtenstein, have managed not to take part ... . It seems obvious that this text negotiated ... at a time when the EU only had 15 member states, is not an efficient tool for fighting fraud. First of all, it does not cover a series of revenues such as share dividends or other products created to dodge the directive. Secondly, it does not concern physical individuals. This explains the blossoming of foundations and all sorts of structures tat can be found in Liechtenstein and elsewhere." (05/03/2008)

Financial Times - United Kingdom

John Christensen is director of the Tax Justice Network and David Spencer is a lawyer specialising in tax and banking law. They consider that "The Liechtenstein Affair could be a watershed in the fight against tax evasion, organised crime and corruption. ... The expanding credit crisis has helped underline the dangers of a lack of transparency in international finance, poor regulation and insufficient co-operation. Fighting tax haven abuses requires tackling all of these. Yet the world risks wasting this political capital on the wrong targets. ... The OECD's approach to tax transparency requires information to be exchanged with other jurisdictions only on request. In other words, you must know what you are looking for before you request it. This is shockingly inadequate. We need the automatic exchange of tax information between jurisdictions and all developing countries must be included." (05/03/2008)

» To the complete press review of Wednesday, March 5, 2008

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