Cyprus

Tax 'Lost' In Panama Papers Worth Up To EUR237bn For EU


By added on 03/05/2017

The total loss to EU member states from the schemes revealed in the Panama Papers could be in the region of between EUR109bn (USD119bn) to EUR237bn, according to a new study commissioned by the European Parliament's PANA committee, reports Tax News.

The Committee of Inquiry into Money Laundering, Tax Avoidance, and Tax Evasion (PANA) has commissioned a range of studies on the impact of money laundering and tax evasion on EU member states' economies and finances.

The Centre for Strategy & Evaluation Services, together with Blomeyer & Sanz, were asked to analyse the impact of the schemes revealed in the Panama Papers. The study focused on a sample of eight member states: Cyprus, the Czech Republic, Denmark, France, Germany, Poland, Spain, and the UK.

The resulting report concluded that "the schemes revealed by the Panama Papers directly reduce the funds available to national authorities." In the sample of eight countries, losses of approximately EUR88bn were attributed to the base erosion and profit shifting involved in the schemes.

The report stated: "There is likely to be a revenue loss of approximately EUR19bn in our sample of eight EU member states alone. If this estimate is scaled up, this suggests a cost of the schemes to the EU28 in the range of EUR109bn – EUR237bn (inclusive of the Panama Papers and other schemes like it)."

The report also calculated that "around 1.5 million jobs could have been supported with the money that was lost to national authorities because of the tax loss associated with the schemes."

The study recommended that the EU:

Promote the establishment of registers that publicize beneficial ownership;

Encourage higher tax good governance standards;

Retain the political neutrality of the definition of a tax haven;

More closely relate information on Anti-Money Laundering and Tax Transparency rules;

Introduce measures to guarantee the protection of whistleblowers;

Develop methodologies for generating publicly available, reliable, and comparable data on the scale of tax avoidance and evasion; and

Promote the integrity and transparency in the financial sector.