Efforts to tackle cross-border tax evasion in the European Union which could see everyone having a European taxpayer’s code and a tax identification number were unveiled in Brussels.
The proposals were revealed by the European Commission (EC) which has announced two consultations as part of plans to combat tax fraud and tax evasion.
The EC has set out 34 proposals for implementation in the coming years to stem an £860 billion estimated tax loss to fraud and evasion in the EU.
The biggest change could happen this year with the introduction of a Europe-wide taxpayer’s code which, they say, will make tax collection easier.
The EC also points out that the European tax code would bring transparency and reduce the number of mistakes in tax returns as well as clarifying the rights of taxpayers and their tax collectors.
Tax codes
National tax codes already exist in many EU nations, but they vary considerably which makes tax collection a complicated business for citizens and companies.
Algirdas Šemeta, the commissioner for taxation, said: “As we intensify our battle against tax evaders, we must also make it easier for the willing to comply.
“This would be the point of an EU Taxpayers’ Code, and we are asking taxpayers themselves to help shape it.”
He added that to help authorities identify those who owe taxes, a tax identification number would benefit everyone and he is urging anyone with any input to get in touch and make their case.
From next year onwards, the EC would like to see the tax identification number introduced and the debate will be about whether it is to be an entirely new number or one that is added to an existing code.
Identifying taxpayers
Again, the EC acknowledges that many member states already have national taxpayer codes, but these make the identification and recording of foreign numbers complicated.
With increasing cross-border trade and the movement of citizens between countries, the EC says more should be done to properly identify taxpayers and to ensure everyone pays their tax.
The new system would also help prevent people being a taxed twice on the same income and help resolve any misunderstandings by taxpayers who may not understand the tax regime in the country where they are living.
Before any new rules are proposed, the EC is looking at what works best in a number of countries and they are particularly looking at compliance and how the tax authorities help prevent those looking to mitigate their tax bills.
