A new EU committee aims to address tax fraud and evasion, but in terms of the primary global problem of money laundering? Not so much.
The Committee on Economic and Monetary Affairs (ECON) is a body of the EU Parliament which holds responsibility for critical monetary functions including:
- The EU financial and international monetary system
- Regulations around financial aid and competition
- EU economic and monetary policies
- Movement of payment, capital, and lending policy through the EU
Tax evasion is a known global problem. As the gap between individuals and countries with wealth, and those without widens, economic instability increases, especially in the present COVID-19 environment. Half-measures take by some states or lip service given to the problem of tax avoidance has not deterred the problem in the EU any better than it has in the US.
On June 18, 2020, the ECON voted to create a new 30-member subcommittee with a mandate to assist ECON “on tax matters, for tax-related matters and particularly the fight against tax fraud, tax evasion and tax avoidance, as well as financial transparency for taxation purposes.”
This is the first time the EU has created a permanent subcommittee to address tax evasion and avoidance. Curiously though, responsibilities of the new tax committee do not involve money laundering—a practice that systematically draws money away from legitimate taxing entities into the coffers of offshore tax jurisdictions and opaque foreign bank accounts.
Because of the COVID-19 pandemic, EU countries are eager to tap into potential revenue streams that may currently be unsourced due to tax avoidance. That said, some prominent members of ECON include countries well-known for tax policies that aid companies in attempts to skirt tax authorities in countries where income is actually earned. These jurisdictions, including Cyprus, Luxembourg, and Ireland, are not likely to support a crackdown on the policies that are keeping their economies afloat—especially in the current environment.
The creation of the subcommittee may bring more light—and future action—to a stage where money routinely flows off the table into unseen, and untaxed, coffers.
The use of foreign banks and offshore tax havens is not a tax crime. If you are interested in shielding wealth during financial crises, talk to a tax attorney about the legitimate means to grow and protect assets, without attracting the attention of the IRS.
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With offices in Chicago and Cleveland, the legal team at Robert J. Fedor, Esq., LLC help clients respond to IRS audits and allegations of offshore tax improprieties or tax crime. When you need experienced legal advice locally or abroad, call 800-579-0997 or contact us.