Future policies on tax avoidance and offshore wealth: what to expect?
Have you heard of the EU Tax Observatory? It is an independent research laboratory which conducts research on taxation. On 13 June 2022, the Observatory held its first annual conference in Brussels to discuss the future policies on tax avoidance and offshore wealth. Find out what happened.
Created on the initiative of the European Parliament, the EU Tax Observatory is an independent research centre with a focus on addressing the societal challenges of tax avoidance, tax evasion and aggressive tax planning and potential solutions to these problems.
The Observatory aims to disseminate its cutting-edge research to citizens and policymakers alike, propose concrete solutions to tax evasion and fraud, and make EU tax data available for all.
On 13 June, at the first annual conference organised by the Observatory it was highlighted that a tax system appropriate for the 21st century is still to be invented, given the inequalities and ecological challenges we face.
Introducing a global minimum corporate tax rate set at 15 %
Pillar 2 of the Organisation for Economic Co-operation and Development (OECD) global minimum corporate tax agreement was in the spotlight at the event. Signed by 137 countries in October 2021, it aims to address the tax challenges arising from digitalisation and globalisation of the economy by introducing a global minimum corporate tax rate set at 15 %.
Even though the implementation of Pillar 2 could represent a historical step in taxation, some participants of the event pointed out that it must not be seen as an imposition on low-income countries but as a new tax system based on cooperation and fairness for all those concerned.
A global assets registry
Some participants at the conference outlined that the financial sanctions against Russian oligarchs highlighted how many countries do not know who owns assets in their respective territories.
It is worth noting that the equivalent of 10 to 13 % of global Gross Domestic Product (GDP) is held as offshore wealth (which includes real estate, bank accounts, bonds and stocks, business assets, luxury goods like yachts, planes, artwork and jewellery). It is therefore important to monitor international financial flows and offshore wealth.
Speakers agreed that a Global Asset Registry would be a solution to tackle this phenomenon. This registry would be based on the Automatic Exchange of Information (AEoI) under the Common Reporting Standard and on beneficial ownership registries.
It is expected that this registry, once in place, would improve financial transparency.
Beware of the dark side
Promoting transparency in tax is essential, especially among young learners who will grow up to be responsible future citizens. TAXEDU has a treasure trove of useful resources in the teacher’s corner with modules like Beware of the dark side or True Players are Taxpayers that will help pupils to understand the importance of being a fair tax player.