August 19, 2009

EU commissioner proposes shared tax data

The European Union taxation commissioner has proposed union member states share tax information to curtail value added tax fraud.

The primary target of the scheme proposed by tax commissioner Laszlo Kovacs is called carousel fraud, in which a marketer buys goods in a country with no sales tax and sells it in a country that charges sales tax, then fails to pay the tax.

Germany estimated it losses $24 billion per year in tax fraud, the Euobserver reported Wednesday. Estimates lost sales tax Europe run as high as $350 billion per year.

Kovacs is backing the creation of a tax data bank available to 27 EU member states.

In the current economic situation it is more important than ever to fight tax fraud efficiently and a fully functioning administrative cooperation between tax administrations is key in that respect, he said in a statement.

Such a plan requires unanimous approval from the 27 EU member states, which could be a tall order, given political tendencies to protect sovereign information.