European Parliament Members Adopt New Recommendations to fight Tax Fraud and Money Laundering

The parliament members adopted a comprehensive set of regulations stemming from the previous records of Pandora papers and other leaks.

The members of the European Parliament have agreed on a set of recommendations that aim to prevent money laundering and tax fraud. The report from Neils Fuglsang, a Member of the European Parliament, calls for continued momentum to enact the proposed legislation. The initiative was adopted by Parliament’s economic and monetary affairs committee by 46 votes in favor and 7 absentations. More commitments to correctly enforce and implement the agreed recommendations are considered necessary to make suggestions for hosting a new reform.

Mr Fuglsang stated,  “It has been my primary goal during negotiations to push for a real commitment and concrete tools in our fight against tax evasion in the EU. I am particularly proud of our agreement on the taxation of capital gains and limiting harmful tax practices aimed at attracting foreign-earned income, wealth and assets. This is the first time we state such a clear call on the Commission and Member States to act on these areas, and therefore this is an important step towards strengthened tax fairness.”

He added, “Moreover, for the first time, we are addressing the potential issues of tax regimes designed to attract digital nomads as well as foreign-earned income or wealth which, according to the researchers, are harmful to various degrees.”

The report carries recommendations for protecting journalists and whistleblowers by reducing interest conflicts and better-regulating intermediaries. It also improves the reporting and information sharing mostly on beneficial ownership to address the practices that impact tax collection negatively. For instance the use of crypto-assets, and golden passports for making certain transactions. 

The report takes an equally important vision of tax regimes designed to attract foreign nationals. It calls for the assessment of these regimes, also calling the commission to assess the possibility of minimum tax on capital gains at the EU level. The report adds to investigate the unexplained wealth.

Similarly, previously adopted resolutions criticise the system to elaborate the EU’s tax haven blacklist and also demonstrate how it should be reformed. The report from parliament members calls on the Council to reassess the US framework of the EU list, mentioning that it contains shortcomings particularly, regarding tax transparency criteria. 

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