February 25, 2021

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Billions of euros lost to poor tax data, EU watchdog says

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Governments lose €50B-€70B a year by failing to share tax info, European Court of Auditors says.

EU governments are losing more than €50 billion a year due to poor sharing of data among tax administrators, the European Court of Auditors said.

The watchdog issued the warning in a report Tuesday following investigations in Cyprus, Italy, the Netherlands, Poland and Spain.

Poor and underused data means the EU is missing out on revenue between €50 billion to €70 billion that’s lost to tax avoidance every year, the administrative auditors said. That annual figure rises to €190 billion if including “special tax arrangements” for companies — often criticized as sweetheart deals — and collection inefficiencies.

“Initiatives in recent years have given administrations unparalleled access to tax data,” Ildikó Gáll-Pelcz, the ECA member responsible for the report, said in a statement. “Yet, the information exchanged still needs to be used much more for the system to reach its full potential.”

The problems lie within the EU’s Directive on Administrative Cooperation (DAC), which Brussels has updated seven times.

The latest update came in December, when EU finance ministers agreed that digital commerce platforms such as Airbnb, Uber and eBay must provide transaction data to tax administrators.

The European Commission is planning another upgrade to DAC this year to include the buying and selling of digital financial assets. In its response to the ECA, the Commission said it “generally agrees” that “further work needs to be done.”

While it is “committed to act” to improve data quality, the Commission stressed that it “does not have direct access to the data exchanged.”

Source: POLITICO https://www.politico.eu/article/billions-of-euros-lost-to-poor-tax-data-eu-watchdog-says/?utm_source=RSS_Feed&utm_medium=RSS&utm_campaign=RSS_Syndication

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