EU plans new Tax Identification Number for everyone
One of the aims of the EU has always been political, tax and financial harmonisation as well as combating fraud. Some interesting news circulating this weekend is that the EU wants to launch an EU wide tax system with every EU citizen being given a new EU wide Tax Identification Number (EUTIN). The EU also want to centralise records of all assets held by corporations and individuals.
The harmonised common EUTIN and proposed minimum corporation tax rate of 15% across the EU is intended to prevent unfair competition from member states who may wish to offer low taxation to make inward investment more attractive than other countries.
The EU say that properly identifying taxpayers is essential to the fight against fraud and evasion. More worryingly the EU Tax Authority would have the power to access banking information for every EU citizen and potentially even pull tax money owed from their bank accounts.
Potentially an EUTIN would also be a precursor to an EU wide direct taxation scheme with funds extracted at source in the same way that employees pay income tax in the UK. Tax on savings could also be a future possibility.
The EU say “Proper identification of taxpayers is essential to effective exchange of information between tax administrations. The creation of European Taxpayer Identification Number (EU TIN) would provide the best means for this identification. It would allow any third party to quickly, easily and correctly identify and record TINs in cross-border relations and serve as a basis for effective automatic exchange of information between member states tax administrations”.
Of course we would all welcome fraud prevention, the end of carousel VAT evasion and knowing we were competing on a level playing field. The danger is, the same as HRMC’s efforts in the UK to encourage sole traders to register to pay income tax, that the only people caught will be those trying to do the right thing and anyone running a scam to avoid tax will continue to do so. It’ll also do little to force those outside of the EU to register and pay the correct VAT and taxes and an EUTIN may do little to coerce them to pay up.