European Parliament 2014-2019 Plenary sitting A8-0170/2019 8.3.2019 REPORT on financial crimes, tax evasion and tax avoidance (2018/2121(INI)) Special Committee on financial crimes, tax evasion and tax avoidance Co-rapporteurs: Jeppe Kofod, Luděk Niedermayer RR\1179147EN.docx PE627.890v02-00 EN United in diversity EN PR_INI CONTENTS Page MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION ................................................. 3 OVERVIEW OF ACTIVITIES DURING THE MANDATE ...................................................... 70 I. LIST OF ACRONYMS ............................................................................................................. 70 II. COMMITTEE MANDATE ..................................................................................................... 72 III. COMMITTEE COMPOSITION............................................................................................. 74 IV. ACTIVITIES OF THE COMMITTEE ................................................................................... 78 IV-1. Summary of the Committee’s activities .............................................................................. 78 IV-2. Programme of Committee meetings / Public hearings / Workshops and missions ............. 82 VI-3. List of speakers (Committee meetings/Public hearings /workshops and missions) ............ 86 IV-4. State of play on “Who refused to participate in hearing/delegation and why?” ............... 125 IV-5. Fact-finding missions of the TAX3 Committee ................................................................ 128 IV-5.1 Mission to Washington D.C. - 16 - 18 July 2018 ............................................................ 128 IV-5.2 Mission to Riga (Latvia) - 30 - 31 August 2018 ............................................................. 136 IV-5.3 Mission to Douglas (Isle of Man) - 22 - 23 November 2018 .......................................... 141 IV-5.4 Mission to Estonia and Denmark -6-8 February 2019 .................................................... 146 V. LIST OF STUDIES ................................................................................................................ 151 INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE ................................... 153 FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE ...................................... 154 PE627.890v02-00 2/154 RR\1179147EN.docx EN MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION on financial crimes, tax evasion and tax avoidance (2018/2121(INI)) The European Parliament, – having regard to Articles 4 and 13 of the Treaty on European Union (TEU), – having regard to Articles 107, 108, 113, 115 and 116 of the Treaty on the Functioning of the European Union (TFEU), – having regard to its decision of 1 March 2018 on setting up a special committee on financial crimes, tax evasion and tax avoidance (TAX3), and defining its responsibilities, numerical strength and term of office1, – having regard to its TAXE committee resolution of 25 November 20152 and its TAX2 committee resolution of 6 July 20163 on tax rulings and other measures similar in nature or effect, – having regard to its resolution of 16 December 2015 with recommendations to the Commission on bringing transparency, coordination and convergence to corporate tax policies in the Union4, – having regard to the results of the Committee of Inquiry into money laundering, tax avoidance and tax evasion, which were submitted to the Council and the Commission on 13 December 20175, – having regard to the Commission’s follow-up to each of the above-mentioned Parliament resolutions,6 – having regard to the numerous revelations by investigative journalists, such as the LuxLeaks, the Panama Papers, the Paradise Papers and, more recently, the cum-ex scandals, as well as the money laundering cases involving, in particular, banks in Denmark, Estonia, Germany, Latvia, the Netherlands and the United Kingdom, – having regard to its resolution of 29 November 2018 on the cum-ex scandal: financial crime and loopholes in the current legal framework7, 1 Decision of 1 March 2018 on setting up a special committee on financial crimes, tax evasion and tax avoidance (TAX3), and defining its responsibilities, numerical strength and term of office, Texts adopted, P8_TA(2018)0048. 2 Resolution of 25 November 2015 on tax rulings and other measures similar in nature or effect, OJ C 366, 27.10.2017, p. 51. 3 Resolution of 6 July 2016 on tax rulings and other measures similar in nature or effect, OJ C 101, 16.3.2018, p. 79. 4 OJ C 399, 24.11.2017, p. 74. 5 Recommendation of 13 December 2017 to the Council and the Commission following the inquiry into money laundering, tax avoidance and tax evasion, OJ C 369, 11.10.2018, p. 132. 6 The joint follow-up of 16 March 2016 on bringing transparency, coordination and convergence to corporate tax policies in the Union and TAXE 1 resolutions, the follow-up of 16 November 2016 to the TAXE 2 resolution and the follow-up to the PANA resolution of April 2018. 7 Texts adopted, P8_TA(2018)0475. RR\1179147EN.docx 3/154 PE627.890v02-00 EN – having regard to its resolution of 19 April 2018 on protection of investigative journalists in Europe: the case of Slovak journalist Ján Kuciak and Martina Kušnírová8, – having regard to the studies prepared by the European Parliamentary Research Service on ‘Citizenship by investment (CBI) and residency by investment (RBI) schemes in the EU: state of play, issues and impacts’, ‘Money laundering and tax evasion risks in free ports and customs warehouses’ and ‘An overview of shell companies in the European Union’9, – having regard to the study on ‘VAT fraud: economic impact, challenges and policy issues’10, the study on ‘Cryptocurrencies and blockchain – Legal context and implications for financial crime, money laundering and tax evasion’ and the study on the ‘Impact of Digitalisation on International Tax Matters’11, – having regard to the Commission studies on ‘aggressive tax planning indicators’12, – having regard to the evidence collected by the TAX3 committee in its 34 hearings with experts or exchanges of views with Commissioners and Ministers and during the missions to Washington, Riga, the Isle of Man, Estonia and Denmark, – having regard to the modernised and more robust corporate tax framework introduced during this legislative term, notably the Anti-Tax Avoidance Directives (ATAD I13 and ATAD II14) and the reviews of the Directive on Administrative Cooperation in taxation (DAC)15, 8 Texts adopted, P8_TA(2018)0183. 9 Scherrer A. and Thirion E., Citizenship by Investment (CBI) and Residency by Investment (RBI) schemes in the EU, EPRS, PE 627.128, European Parliament, October 2018; Korver R., Money laundering and tax evasion risks in free ports, EPRS, PE 627.114, European Parliament, October 2018 and Kiendl Kristo I. and Thirion E., An overview of shell companies in the European Union, EPRS, PE 627.129, European Parliament, October 2018. 10 Lamensch M. and Ceci, E., VAT fraud: Economic impact, challenges and policy issues, European Parliament, Directorate-General for Internal Policies, Policy Department A – Economic, Scientific and Quality of Life Policies, 15 October 2018. 11 Houben R. and Snyers A, Cryptocurrencies and blockchain, European Parliament, Directorate-General for Internal Policies, Policy Department A – Economic, Scientific and Quality of Life Policies, 5 July 2018 and Hadzhieva E., Impact of Digitalisation on International Tax Matters, , European Parliament, Directorate-General for Internal Policies, Policy Department A – Economic, Scientific and Quality of Life Policies, 15 February 2019. 12 ‘Study on Structures of Aggressive Tax Planning and Indicators – Final Report’ (Taxation paper No 61, 27 January 2016), ‘The Impact of Tax Planning on Forward-Looking Effective Tax Rates’ (Taxation paper No 64, 25 October 2016) and ‘Aggressive tax planning indicators – Final Report’ (Taxation paper No 71, 7 March 2018). 13 Council Directive (EU) 2016/1164 of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market, OJ L 193, 19.7.2016, p. 1. 14 Council Directive (EU) 2017/952 of 29 May 2017 amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries, OJ L 144, 7.6.2017, p. 1. 15 Relating respectively to the automatic exchange of tax rulings (Council Directive (EU) 2015/2376 of 8 December 2015 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation, OJ L 332, 18.12.2015, p. 1, DAC3), exchange of country-by-country reports between tax authorities (Council Directive 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation, OJ L 146, 3.6.2016, p. 8, DAC4), access to anti-money-laundering information by tax authorities, beneficial ownership and other customer due diligence (Council Directive 2016/2258 of 6 December 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation, OJ L 342, 16.12.2016, p. 1, DAC5), mandatory automatic exchange of information in the field of taxation in relation to reportable cross-border arrangements (Council Directive 2018/822 of 25 May 2018 PE627.890v02-00 4/154 RR\1179147EN.docx EN – having regard to the Commission proposals pending for adoption, in particular on the CC(C)TB16, the digital taxation package17 and public country-by-country reporting (CBCR)18, as well as Parliament’s position on these proposals,