The EU’s anti-tax fraud programme, Fiscalis, got a shot in the arm from MEPs on Wednesday (17 April), when the European Parliament approved a revised version with a bigger budget. EURACTIV Germany reports.

In the update, cooperation breakdowns between tax authorities will actually be published and officials from developing and emerging countries will also be invited to joint training sessions.

Currently, cooperation misfires do not have to be published.

The Parliament decided that €339 million needs to be made available under the next multiannual financial framework (MFF) for 2021-2027. That means a budget that is 10% higher than the European Commission’s most recent estimate for the long-term financial pot.

575 MEPs voted in favour of the programme, 46 abstained and 35 voted against. Rejection came mainly from MEPs from Eurosceptic groups.

“So far, we have only put money into increased cooperation, but we knew little about the real problems,” MEP Sven Giegold (Greens), the rapporteur for the programme, told EURACTIV.

With this agreement, “additional support for the Fiscalis programme to EU member states is possible so that these can jointly find innovative solutions to the problems faced by our tax administrations,” said EU tax chief Pierre Moscovici.

The use of new technologies could have an “extremely positive” impact in the fight against tax avoidance and evasion, the Commissioner added.

EU’s ‘Tobin tax’ now expected to collect only €3.5 billon The latest proposal for an EU financial transaction tax (FTT) received lukewarm support earlier this week, with expected revenues brought down tenfold, to €3.45 billion annually, under a watered-down version tabled by France and Germany, according to documents seen by EURACTIV.

Under the 2014-2020 MFF, €223 million was budgeted for projects in EU member states and candidate countries. Despite it being a comparatively small budget, the programme is of great added value, Moscovici insisted.

Fiscalis supported EU member states in examining potential back tax claims of more than €590 million in 2015 alone.

The budget increase will not only benefit EU member states, but also developing and emerging countries. These would now also be able to participate in joint training courses for employees of tax authorities – another novelty of the decision.

“Harmonising tax lax is necessary”

The programme only deals with cooperation between authorities because effectively combating tax avoidance and fraud, needs tax law harmonisation, explained Giegold.

VAT systems, for instance, would have to be changed. This is because companies often had their input tax refunded for transactions for which VAT is never paid for.

The Commission estimates that EU member states are currently losing €50 billion due to fraud in this area.

“But proposals to change the system is in no way abstract. Such a proposal is currently in the hands of the Council of the EU,” said Giegold. The same applies to country-specific tax transparency for a corporate tax and a common tax assessment basis.

With EU elections in May, Giegold is expecting the fight against tax fraud to be weakened because of an increasing number of conservatives aligning with Eurosceptic forces, who have shown little willingness to take joint effective action in Europe against tax avoidance.

He mentioned Austria as an example and criticised the fact that the Commission’s proposal for country-specific transparency of corporate taxes was abandoned during the Austrian Council Presidency.

[Edited by Sam Morgan]