European Council to discuss tax evasion and energy

Tax evasion and energy are the two main items on the agenda of the European Council which takes place on Wednesday, in Brussels.

European leaders are also expected to commit to an automatic exchange of data on citizens’ income sources.

They will ask the Commission to start negotiations with third countries in order to further expand cooperation on tax matters.

However, the implementation of the above decisions will take time since there are still disagreements over lifting banking secrecy. Certain member states, such as Austria and Luxembourg, feel that if that becomes the case then it should be accepted on an international level.

Tax evasion causes losses of income for member states of the order of €1 trillion per year which translates to €2,000 by household, EU Commission President José Manuel Barroso has said.

At the same time the European Council is expected to ratify the agreement reached by ECOFIN last Monday, to start negotiations with five third countries in Europe for the automatic exchange of data, namely, Switzerland, Andorra, San Marino, Monaco and Lichtenstein.

An action plan to combat fraud on VAT refunds will also be adopted.

The affordability of energy, reducing dependency and developing domestic production are three aspects of the energy chapter which are expected to be the focus of discussions at the European Council.