EU plans to establish Federal Tax Police Force roaming throughout the community at will:

 

02/02/09 (European Commission) - In the framework of developing new strategies to better combat tax evasion and fraud (IP/06/697), the European Commission today adopted two proposals for new Directives aimed at drastically expanding mutual assistance obligations between Member States' tax authorities in the assessment and the recovery of taxes. Tax payers will no longer be able to invoke bank secrecy in order to resist  cross border disclosures.  Commissioner for Taxation and Customs, László Kovács, said: "In a globalised world, where tax evaders and fraudsters take advantage of the different limitations on national tax administrations, efficient cooperation and mutual assistance between tax administrations is essential in better combating tax fraud. Improved transparency, based on quick and simple information exchange mechanisms, is therefore crucial. In particular, it is unacceptable that bank secrecy in one Member State can be allowed to constitute an obstacle to the correct assessment by the tax authorities of another Member State of the amount of taxes due by one of its resident taxpayers." The proposal will establish common rules of procedure, common forms, formats and channels for exchanging information. Put another way, the plan is to remove legal protections and privacy laws that may get in the way of full disclosure upon demand. It also allows tax administration officials in one Member State to be on the territory of another Member State and to participate actively – with the same powers of inspection - in administrative enquiries carried out there. That sounds very like the establishment of an EU Tax Police Force with community-wide jurisdiction which is not answerable to the courts of the individual sovereign states. Based on the OECD Model Convention, the proposal contains a provision by which a requested Member State cannot refuse to supply information concerning a taxpayer of the requesting Member State solely because this information is held by a bank or other financial institution. As such, the proposal abolishes bank secrecy and indeed any level of financial privacy in the European Union in the relations between tax authorities when a requesting Member State is assessing the tax situation of one of its resident taxpayers. Hopefully, HMRC will be more careful with all of the information that it gets on other EU residents than it was in relation to information that it allowed into the public domain regarding 25 million UK tax payers in 2008.

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