EU Tax Observatory: Addressing Global Tax Evasion 2024

The EU Tax Observatory released a report on global tax evasion in 2024, focusing on various practices beyond mere tax fraud. These practices range from clearly illegal actions like failing to report income in offshore accounts to grey areas like shifting profits to shell companies lacking economic presence. Some tactics, such as moving to jurisdictions with favorable tax regimes, fall within legal bounds but contribute to lowering tax rates for entities benefiting most from globalization, ultimately reducing government revenues and increasing inequality.

The report poses critical questions about the social sustainability of globalization and modern tax systems. It offers six recommendations to tackle tax evasion issues:

Reform the international agreement on a minimum corporate tax rate, setting it at 25%, and eliminate loopholes fostering tax competition.
Introduce a new global minimum tax for billionaires worldwide, set at 2% of their wealth.
Implement taxation mechanisms for wealthy individuals who have resided in a country for an extended period but opt to relocate to low-tax countries.
Take unilateral measures to recover part of the tax deficit from multinational companies and billionaires if global agreements on these matters fail.
Transition towards establishing a global asset registry for more effective combat against tax evasion.
Strengthen the enforcement of economic presence rules and anti-tax avoidance regulations.

This report aims to address pressing concerns about global tax practices, emphasizing the need for comprehensive reforms to promote fiscal fairness and curb tax evasion on a global scale.

You can find executive summary in this link.

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