Political groups in the European Parliament have agreed to stay as close as possible to the OECD tax deal in their opinion on the implementing Directive for Pillar II in order not to jeopardise the already complicated negotiations at the Ecofin Council, the lead negotiator Aurore Lalucq (S&D, French) said on Wednesday 20 April, during a meeting of the committee on economic and monetary affairs (ECON). In her draft report, Ms Lalucq proposed a minimum effective tax rate of 21% instead of 15% and said that flexibility should be provided for Member States who are willing to apply the new rules to smaller entities. This was supported by the Left and the Greens/EFA group but not by the EPP and Renew Europe, which preferred not to change the original text. The rate and the threshold should finally stay unchanged. The final text should also call for a quick transposition of the new rules and propose some amendments on anti-abuse laws, more exchange of information, a 5-year review clause and the use of delegated act in case of modification needed. The opinion should be voted in the ECON committee on 28 April.
The Chief Prosecutor of the European Public Prosecutor’s Office (EPPO), Laura Kövesi, presented, on Wednesday 20 April, the first report of the EPPO for its activities in 2021 to the MEPs of the relevant EP committees. The investigations conducted by the EPPO have resulted in the confiscation of €147 million of assets in 2021. Damages from the 515 active investigations is estimated at €5.4 billion, but Ms Kövesi reportedly said half of the cases involved complex VAT frauds involving several Member States and several dozen suspects. Asked by MEPs about what could be improved, Ms Kövesi said that fraud detection is too weak in some Member States. In 2021, the 2,832 notifications received by the EPPO came from national authorities, European institutions or agencies, such as the European Anti-Fraud Office (OLAF), or civil society. However, in several Member States, national authorities do not report any suspicion of VAT or customs fraud, she reportedly explained.
The Independent Commission for the Reform of International Corporate Taxation (ICRICT) asked, in an open letter on Tuesday 19 April, G20 leaders to set up a global asset register to tackle hidden wealth. “The war in Ukraine shows that we need to tackle tax havens head-on now, by implementing transparency measures as a matter of urgency. It is about targeting all oligarchs, and all forms of wealth hidden from the tax authorities and the public in general and hidden in jurisdictions with high levels of financial opacity”, it wrote. In a report, it details the “practical road” to set up such a registry: - first, introduce beneficial ownership requirements for companies and trusts ; - connect registers of individual asset classes at the national level with existing beneficial ownership registers ; - extend beneficial ownership registration to all types of legal vehicles available and classes of assets ; - begin centralizing the national beneficial ownership data into a one-point source. Existing information at the national level could be gathered at the regional level, for example through the creation of a Taskforce for Asset Ownership, ICRICT suggested.
The Ministers of the Financial Action Task Force (FATF) members committed on Thursday 21 April to take swift and decisive action to improve the effectiveness of measures to fight money laundering, terrorist and proliferation financing at their meeting in Washington D.C. This includes promptly implementing the FATF’s global beneficial ownership rules, which were strengthened earlier this year, to stop criminals from hiding their illicit activities and dirty money behind anonymous shell companies and other corporate structures. Members also pledged to remedy remaining significant technical compliance deficiencies and agreed on strategic priorities for 2022-2024 to enhance the effective implementation of the FATF Standards worldwide. FATF Ministers will meet again in 2024.