Insider Economy Cyprus has tax haven traits, golden visas should be phased out -...

Cyprus has tax haven traits, golden visas should be phased out – EP

The European Parliament voted in favour of measures to clamp down on “tax haven characteristics” and golden visas in seven EU member states, including Cyprus.

The report compiled by the EP’s Tax3 committee received the majority of support from MEPs, with 505 voting in favour and 63 against, though it remains non-binding.

Belgium, Cyprus, Hungary, Ireland, Luxembourg, Malta and the Netherlands were all specifically mentioned for shortcomings in their tax systems that facilitate aggressive tax planning.

The report argues that this undermines the integrity of the European single market, resulting in a loss of €43 billion from EU Member States.

The vote does also agree with the European Commission’s calls to introduce a common corporate tax base in the EU, while the veto over tax issues may now also be removed.

The resolution also calls for “golden visas and passports to be phased out, with those offered by Malta and Cyprus singled out for their weak due diligence”.

Lawmakers said EU states should “phase out” as soon as possible all existing schemes to market citizenship and residency permits to wealthy foreigners. Currently 20 of the 28 EU states run these programmes.

The economic advantages of these schemes “do not offset the serious security, money laundering and tax evasion risks they present”, the resolution said, echoing a report from the European Commission in January.

Co-rapporteur of the committee, Jeppe Kofod (S&D, Denmark), said: “This report is the result of the most comprehensive work ever done by the European Parliament on tax evasion and avoidance. Within the EU we need a minimum corporate tax rate, an end to tax competition and to make it more difficult to bring dirty money in.”

The report further urged the EU Commission to assess money- laundering risks posed by legal arrangements such as special purpose vehicles and non-charitable purpose trusts, especially in Britain and its crown dependencies and overseas territories.

It should be noted that the removal of the veto can only result through an unanimous approval from all member states.

The European Commission will now also conduct “fitness checks” on the laws of the member states named in the resolution to address issues over letter box companies in relation to tax fraud, tax evasion, aggressive tax planning and money laundering.

Background

Following continued revelations over the last five years (Luxleaks, the Panama Papers, Football leaks and the Paradise papers), the European Parliament decided to establish a Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3), on March 1 2018.

The report adopted today concludes the committee’s year-long mandate, which saw it hold 18 hearings dealing with particular topics of interest, 10 exchange of views with finance ministers and European Commissioners, and four fact-finding missions – to the US, the Isle of Man, Denmark and Estonia, and Latvia.

Read more:

https://in-cyprus.com/ep-committee-wants-eu-tax-police-and-aml-watchdog/

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