EU missing out on 1 trillion EUR in tax revenues every year due to tax-evasion

[Aimless]

http://www.reuters.com/article/2013/...93B0KC20130412

...

Tax dodging causes the European Union to lose around 1 trillion euros of income each year, the president of the European Council said on Friday as he announced that EU leaders would discuss the issue at a summit next month.

This hemorrhage of tax revenues is equivalent to the entire annual economic output of Spain, and far exceeds a total of about 400 billion euros committed to bailouts of euro zone members Greece, Ireland, Portugal and Cyprus in coming years.

...

This was reported in 2013. Does anyone know if the situation has improved?

[Steely Glint]

Unlikely.

[Flixy]

How did they get to that number though? Article doesn't link to a source as far as I could see, and it's claimed by Van Rompuy who was putting pressure on Austria/Liechtenstein wrt banking secrets - so he'd have a reason to inflate the number. Not that I don't believe it's high, and I'm curious about the numbers per country.

Does tax evasion include legal loopholes or just illegal tax dodging?

edit: slightly older, but loads of numbers:

http://www.tackletaxhavens.com/Cost_...d_Nov_2011.pdf

[RandBlade]

Unlikely.

Agreed.

Maybe the EU could start with getting its own books signed off by auditors, which has been a perennial issue for 19 years in a row.

EDIT: Interesting link Flixy. US tops the list at a third of a trillion, EU doesn't feature. Europe as a whole though is losing $1.5trn approximately according to that but that means primarily European nations which is not the same as the EU.

[Flixy]

You can add them all up yourself if you want to

[Aimless]

One source https://www.google.se/url?q=http://w...z0p7yFhABlhNA:

mostly the illegal kind. Cute Dread saying this is only because tax rules are so complex that people break the law purely by accident

[RandBlade]

Cute referring to illicit activities as tax evasion.

[Being]

Cute referring to illicit activities as tax evasion.

Tax evasion is illicit in the US.

[LittleFuzzy]

Tax evasion is illegal in the US. The problem is lumping tax avoidance which is legal but which various people get deeply upset about because they feel it violates the spirit of taxation law to try and minimize your tax burden and not pay more than you have to, with evasion which is actually illegal.

[RandBlade]

Tax evasion is illicit in the US.

If I understand the linked statistics correctly it isn't referring to tax evasion (as in people deliberately evading taxes for the purpose of evading taxes) but includes all illicit activity - eg drugs trade and illegal prostitution etc

Now Capone may have been convicted for tax evasion but that wasn't why he was doing what he was doing. No matter what the tax structure is, the tax on illegal activities will always by definition be evaded and not declared.

EDIT: Re-reading it they were already excluding illegal activities. My mistake. I'm skeptical that 12.5% of British GDP is in a shadow economy if you're excluding illegal activities.

[Aimless]

Tax evasion is illegal in the US. The problem is lumping tax avoidance which is legal but which various people get deeply upset about because they feel it violates the spirit of taxation law to try and minimize your tax burden and not pay more than you have to, with evasion which is actually illegal.

Fortunately that report at least gives figures for both kinds of shenanigans

[RandBlade]

But the reports are all made based on rough estimates and guesses. There is a guess about the size of the shadow economies, it is not known (or knowable).

[Dreadnaught]

Who can blame the donkeys when the taxes are too damn high?

[Veldan Rath]

When did dread turn into me?

It's unsettling.

[Being]

When did dread turn into me?

It's unsettling.

Pretty sure we established that is not Dread from CC.

[RandBlade]

I think we need a fireman photo to prove his identity.

[LittleFuzzy]

Fortunately that report at least gives figures for both kinds of shenanigans

I think the proportions reported are a bit out of whack too, but I was reminded that they include the statistics from countries like Italy so maybe it's just to be expected.

[GGT]

Tax evasion is illegal in the US. The problem is lumping tax avoidance which is legal but which various people get deeply upset about because they feel it violates the spirit of taxation law to try and minimize your tax burden and not pay more than you have to, with evasion which is actually illegal.

What is "the spirit" of taxation? When that's something people can disagree about, it becomes a political wedge issue.

In the US, it's pretty easy to avoid paying taxes. You can be a tax-exempt or non-profit organization, or have a team of lawyers who specialize in finding tax loopholes.....but that doesn't necessarily fit with "the spirit" of funding public services with tax dollars.

In the EU, countries (like Greece) have conflated tax evasion and tax avoidance in their public policies....because their political systems have been corrupt for so long they can't distinguish between the two. (It's getting harder for the US to make those distinctions, too.)