EXCLUSIVE: European tax havens could face sanctions including blacklisting when the European Commission issues clampdown measures later this year, Taxation Commissioner Algirdas Šemeta has told EURACTIV in an interview.

An initiative to fight tax havens and aggressive tax planning will be published before the end of the year as part of a broader action plan to deal with tax evasion, Šemeta said.

The commissioner published a communication on tax fraud and evasion before the summer, and has already presented a proposal for a quick-reaction mechanism to fight against VAT fraud in connection with the policy.

The action plan will put more flesh on the bones of the proposal, he said.

‘Stick and carrot’ approach

On tax havens – including those isles offshore the UK such as the Channel Islands – he advocated a ‘stick and carrot’ approach.

"It is not a secret that a lot of tax evasion is taking place within our member states, and they have to simplify their tax collection systems to try to offer incentives to pay taxes," Šemeta said.

Referring to the proposals under discussion, he said: “The application of withholding taxes for payments to such countries, and blacklisting such countries could be strong tools in terms of sticks. Whilst in terms of carrots, of course we could include better conditions of entry to EU markets.”

The Lithuanian commissioner also panned Luxembourg and Austria for continuing to resist reform of the EU Savings Directive designed to enable cooperation on the identity of bank deposit holders.

"We continue to work on pushing member states to give a mandate to the Commission to negotiate with Switzerland, Liechtenstein and the three micro-states for agreements on savings taxation on the issue of exchange of information," he said.

"Unfortunately we are still not there, because of the blockage of the two member states concerned – Luxemburg and Austria. I am currently working very hard with the Cyprus presidency to convince those member states to improve the situation on tax collection from savings,” Šemeta said.

Fiscal union will have a tax impact

He added that the problems of capital flight and tax evasion in Greece highlighted the need to more cooperation on the issue, saying: “Taking into account the situation that we have in Greece I think it is untenable that those two member states continue to block progress on the files.”

A former economist, Šemeta said that the crisis and forthcoming initiatives on banking and fiscal union would have clear tax repercussions for the EU.

“Fiscal policy is closely linked to tax policy,” Šemeta said, though he added that this did not mean the introduction of common taxes.

Rather, there is a need to exchange information and to coordinate policies.

“That co-ordination will, I believe, continue to strengthen,” he said.

Click here to read a full transcript of the interview