The European Commission announced that it will adopt a new action plan to fight tax evasion in the second quarter of 2020. The Commission opened a public consultation for this purpose. The Action Plan will not only include key initiatives to tackle tax evasion and tax fraud but also to simplify the tax system in order to make compliance easier. It will also launch the External Strategy on tax good governance 2020.

The Commission points out that billions of euros are lost due to tax evasion every year in the EU (see also the news item on the recent Kiel study on VAT fraud). On the one hand, efforts by national tax authorities to tackle tax evasion are increasingly being hampered by new business models, especially those based on digital technology. On the other hand, companies that do business in the single market need a simpler and more up-to-date tax system.

Against this background, the new Action Plan is to implement Ursula von der Leyen’s vision that Europe will be “an economy that works for people.” This includes fair taxation, so that everybody pays their fair share, and the creation of a tax environment in which the economy can grow. The Action Plan is also to take advantage of the latest developments in technology and digitalisation.

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