S&D Euro MPs today welcomed the European Commission’s new proposals to combat VAT fraud following the revelations of the Paradise Papers and called on EU governments to take action without any delay.
S&D Group vice-president Udo Bullmann and S&D Group spokesperson on economic and monetary affairs, Pervenche Berès, said:
“The Socialists and Democrats in the European Parliament are fully behind the European Commission in its efforts to combat VAT fraud. The common value added tax represents a large amount of revenue, not only for EU governments, but also for the EU budget. One of the own resources of the EU budget is based on VAT.
“Every year, member states lose more than €151 billion in tax revenue due to VAT fraud, including €50 billion through the so-called ‘carousel fraud’ on cross-border operations.  In these times of tight public finances, Europe cannot turn a blind eye to such blatant cases of fraud.
“The EU VAT system, supposed to be transitional, was created in 1993. It is outdated, unduly complex and largely ill-adapted to the current flows of cross-border and digital operations.
“The Paradise Papers leaks have revealed how easy it can be for wealthy people and big businesses to avoid paying the right VAT rates through ingenious tax schemes involving shell companies. It is therefore crucial that tax authorities work closely with law enforcement bodies to identify the fraudsters.
“This new proposal must be followed soon by two others, on VAT for SMEs and VAT rates, for which our Group has high expectations."
“A modern and fraud-proof definitive VAT system must take over. Therefore, it is also urgent that the Council agrees on the files currently halted by the member states, such as the e-books and e-commerce VAT dossiers.

“The EU must react swiftly; it is a matter of fairness and social justice.”

MEPs involved




S&D press contact

Hélin-villes Solange
Head of Unit



Related news

Press release

We are still in the ‘whatever-it-takes’ phase of the recovery, say S&Ds to Commission as they call for an extension of the escape clause

Press release

pCBCR: S&Ds stand ready to start negotiations tomorrow on crucial tax transparency tool

Press release

pCBCR: S&Ds call on EU ministers to finally heed citizens’ call for tax transparency of big businesses