The European Parliament's economic affairs committee today adopted a report on tax evasion, setting out its position ahead of next month's EU summit, which will deal with the issue. The Greens have consistently highlighted loopholes in EU legislation and deficiencies in EU tax policy, which facilitate tax avoidance (1), and welcomed the report adopted today, which underlines key measures to address this. After the vote, Green MEP Bas Eickhout (Netherlands) said:

"Today's vote gives a strong signal to EU governments to stop sitting on their hands and speed up implementation of crucial measures to tackle tax avoidance in the EU. The EU can only play a strong role in the global fight against tax evasion if it has robust rules on tax avoidance itself.

"Adopting a common definition for tax havens, blacklisting these havens and revising tax agreements, which facilitate tax evasion, must be a top priority. The European Commission has presented proposals to this end, which EU member states must swiftly enact. A common European approach for addressing the harmful effects of tax evasion on developing countries is also needed, and we welcome today's vote to this end.

"There is an urgent need to conclude the revision of key EU tax legislation, with a view to removing the loopholes that facilitate tax avoidance. EU governments need to speed-up decision-making on the EU common consolidated corporate tax base, as well as on the revisions of the parent-subsidiary and interest and royalties payments directives to this end. Unanimity decision-making on taxation is clearly frustrating progress, and we ultimately need to move to a more effective decision-making process.

"Accounting transparency is also crucial to combating tax evasion and MEPs have recognised this today. Companies should be obliged to produce country-by-country reports, with a view to limiting the scope for tax avoidance. Whilst the EU has now introduced this for select sectors, there is a need to expand this to cover all industries, with sanctions for avoidance.

"'Legitimate' tax evasion and avoidance deprives exchequers in EU member states of €1 trillion in revenue per year, according to the EU Commission. The failure to address this problem in the context of the current economic crisis is scandalous, all the more so given the growing acceptance that the exclusive preoccupation with contracting public spending has exacerbated problems in crisis countries. Robust action on tax avoidance would counterbalance this. "

(1) The Greens presented a European tax pact - a call to action on European tax policy, setting out key measures to be taken at EU-level to address tax evasion and avoidance - to the Irish EU presidency in January: http://tinyurl.com/EU-Tax-Pact-ie