EU proposes tougher rules to tackle tax evasion

The European Commission on Thursday proposed new measures to clamp down on tax dodgers who stash their cash in offshore accounts or use tax-free intermediaries. Current European regulation, "although effective within the limits of its scope, can be easily circumvented," EU Taxation Commissioner Laszlo Kovacs said in a statement.
The problem has been highlighted during the current financial crisis, with tax havens such as Liechtenstein and Luxembourg put under the spotlight. It will also be on the agenda at this weekend''s G20 summit in Washington, dedicated to the global financial and economic crisis.
The scope of the rules "needs to be extended in order to meet our goal of stamping out tax evasion, which affects the national budgets and creates disadvantages for the honest citizens," Kovacs added. The measures were drawn up after EU finance ministers, under pressure from Germany, called for the 2005 savings taxation directive to be reviewed in light of revelations of alleged tax fraud by rich Germans hiding their cash away in Liechtenstein.