A tax policy for the European Union

Talk of a single EU tax policy is back. Could it pan out this time? 

In March, the European Commission presented a package of measures to encourage transparency in the EU’s tax policies. The core proposal in the tax transparency package is to introduce the automatic exchange of information between member states on their tax rulings with multinational companies.

The Commission is proposing a strict timeline: every three months, national tax authorities will have to send a short report to all other member states on all cross-border tax rulings that they have issued. Member states will then be able to ask for more detailed information on a particular ruling. The Commission hopes this crosscutting scrutiny will dissuade countries from adopting unfair tax policies and make it harder for multinationals to cut their tax bills by cunningly exploiting loopholes.

Tax evasion and tax avoidance are estimated to leave EU member states’ coffers short of between €28 billion to 1,000 billion a year. But the very nature of the phenomenon means these figures are not very reliable, so much so that the Commission has decided to work with Eurostat and the member states to come up with a more accurate estimate. 

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