Issue link: https://maltatoday.uberflip.com/i/1364335
11 EUROPE 22.4.2021 TAX policy, including the fight against tax fraud, has become a hot topic over the past decade due to journalistic investigations such as LuxLeaks, the Panama Papers, Football Leaks, Ba- hamas Leaks and the Paradise Papers, which revealed tax leaks and tax ha- vens. ey led to increasing unhappiness about damaging tax practices, particu- larly after the recession and the result- ing budget constraints. Unpaid taxes re- sult in smaller budgets both nationally and at EU level. Tax policy has remained EU coun- tries' own responsibility since the EU's beginning, but the fight against tax fraud is shared by EU countries and the EU. Taxation a priority for the European Parliament Since September 2020, the Parlia- ment has had a permanent sub-com- mittee on tax matters. The committee was established to assist the economic and monetary affairs committee with taxation issues and deals with the fight against tax fraud, tax evasion and tax avoidance, as well as financial transparency in taxation. During the 2014-19 parliamentary term, Parliament set up temporary special committees, including a spe- cial committee on financial crimes, tax evasion and tax avoidance and an inquiry committee Inquiry to in- vestigate alleged contraventions and maladministration in the application of EU law in relation to money laun- dering, tax avoidance and tax evasion. These committees identified a num- ber of flaws in tax provisions. EU tax measures Some of the main legislative pro- posals in recent years regarding tax relate to the exchange of information through the Directive on Adminis- trative Cooperation, which has been amended many times to provide: • Automatic exchange of infor- mation relating to financial ac- counts where a taxpayer is ac- tive in another country than the country of residence • Exchange of tax rulings between member states to disclose to other EU countries and the Eu- ropean Commission, for exam- ple "tax planning schemes" of- fered to specific companies • Country-by-country informa- tion provided by large multina- tional enterprises and shared between EU countries to prevent multinationals that are active in different countries from engag- ing in aggressive tax-planning practices not available for do- mestic companies • Money laundering information Other proposals relate to corporate taxation and tax avoidance for exam- ple: The common consolidated corpo- rate tax base (CCCTB), which ad- dresses the tax obstacles that arise from different national tax systems for companies that operate in the in- ternal market in order to avoid the risks of double taxation or aggressive tax planning Corporate taxation of a significant digital presence to allow members states to tax profits made in their ter- ritory, even if a company is not physi- cally present there A common system for a digital ser- vices tax, a tax on revenues stemming from for example the transmission of data collected about users on digital interfaces In addition, there have been many proposals to update the VAT frame- work. The tax matters subcommittee is currently working on a report on how to create a new basis for taxing the profits of digital companies in countries where they operate, even when they do not have a physical pres- ence. The report will set out Parliament's views ahead of the final global negoti- ations at the OECD, which are expect- ed to be finalised by mid-2021. By June at the latest, the Commission is also expected to put forward a proposal on a digital levy as part of reforming the EU's system of own resources and fi- nancing the economic recovery after the Covid-19 pandemic. Tax policy: EU solutions to prevent tax fraud and avoidance These articles are part of a content series called Ewropej. This is a multi-newsroom initiative part-funded by the European Parliament to bring the work of the EP closer to the citizens of Malta and keep them informed about matters that affect their daily lives. These articles reflect only the authors' view. The European Parliament is not responsible for any use that may be made of the information it contains.