Is "the right time" for the fight against tax-evasion to come out? Notes on the current International framework.
Law enforcement Agencies from Austria, Belgium, Germany, Ireland, Italy, the Netherlands, Norway, Poland, Spain, Sweden, Switzerland and the UK have jointly arrested members of a group responsible for value-added tax fraud worth €320M, in the few days before the ambitious EU corporate tax reform.
It said:
"The group behind the criminal activity used a sophisticated infrastructure (buffer companies, missing traders, companies functioning as alternative payment platforms) to facilitate money laundering and crime-related money transfers spread over various member states and a number of third states."
Only for the British government there was ï¿¡13.1bn in uncollected VAT in 2013/14. A couple of months ago, HMRC has launched a consultation on the introduction of a new penalty for those participating in VAT fraud. The aim is clearly to expand more the category of the relevant misconducts. It can relate both to companies and individuals. This consultation proposes the introduction of a fixed penalty of 30% of any VAT which ought to have been paid but for the fraud, applying to anyone who knows or ought to have known that the transactions they were party to were part of a fraud on the VAT system. Comments on the above proposals are expected by 11 November 2016.
Every year 170 billion euros goes missing through EU-wide VAT fraud.
Despite the complexity of the issue from a legislative point of view, it should be considered that more than four years of technical discussions in Council would suffice to finally agreed to new transparency rules for tax rulings and reports on multinationals' tax-related activities (perhaps, improving also GDP and welfare). The announced directives will enter into force as of 1 January 2020, provided that the member states adopt it. However, given the opposition of Members such as Denmark and the Netherlands, the final product of this harmonization process will arrive not earlier than the forthcoming discussion at the European Parliament.