Scrap banking secrecy to end tax evasion worth €200 billion

Two reports adopted in Strasbourg were presented by S&D members Magdalena Alvarez of Spain and Leonardo Domenici of Italy, calling for automatic exchange of information between tax authorities in member states and better governance in the policy.

In his report on good fiscal governance, Mr Domenici calls for improvement of standards set by the OECD and the G20 as well as more effective action against tax havens. This would be achieved in particular by strengthening OECD criteria about non-cooperative jurisdictions.

At present, national administrations share information only in response to a direct request.

"If Europe wants to fight fraud and tax evasion effectively, we have to end banking secrecy across Europe and strengthen cooperation between tax authorities," said Ms Alvarez and Mr Domenici.

"Every year, tax evasion accounts for two per cent of the wealth produced by the EU. This fiscal loss is intolerable at a time when the member states are strangled by profound budget deficits caused by the financial crisis. Moreover, this is a question of tax justice for millions of European citizens who regularly pay their taxes.

"The European Commission must put pressure on foot-dragging by member states that maintain banking secrecy in discussions on savings tax."

The automatic exchange of information between tax authorities should apply to all taxes, direct and indirect, including obligatory contributions to social security, with the exception of VAT and taxes that are governed by separate legislation.