The Council, on proposals by the Commission in the past two years, adopted a new framework for administrative co-operation. According to the Commission, this set of new legislative instruments paves the way for the development of new tools and instruments by the Commission and member states.

The proposal, adopted on 13 November 2008 to introduce changes to Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments that will permit the closing of loopholes in the Directive and therefore improve the effectiveness of this instrument. The Commission therefore urges the Council to adopt these proposals without delay.

The invitation of the Council to sign and conclude the draft anti-fraud and tax co-operation Agreement between the EU and its member states and to adopt the draft mandate for opening similar negotiations with four other neighbouring third countries.

The proposal, adopted on 31 July 2012, for a Quick Reaction Mechanism against VAT fraud, which, if adopted, would enable the Commission to very quickly authorise a member state to adopt derogating measures of a temporary nature in order to tackle cases of sudden and massive fraud with a major financial impact (see Legal update, VAT: European Commission adopts draft Directive establishing a quick reaction mechanism to fight fraud).

The proposal, adopted on 29 September 2009, regarding an optional application of the VAT reverse charge mechanism in relation to supplies of certain goods and services susceptible to fraud.

The adoption of a Commission Decision of 3 July 2012 on setting up the EU VAT forum. In this forum, representatives of large, medium and small businesses and tax authorities can exchange views on practical cross border aspects of VAT administration, as well as identify and discuss best practices that could contribute to streamlining the management of the VAT system, aiming at reducing compliance costs, while at the same time securing VAT revenue.

A Recommendation regarding measures intended to encourage third countries to apply minimum standards of good governance in tax matters. This Recommendation foresees a strong EU stance against tax havens, going beyond the current international measures. Using common criteria, member states are encouraged to identify tax havens and place them on national blacklists. Specified measures to persuade these non-EU countries to apply EU governance standards are also set out. The Commission considers this Recommendation as an important practical first step to align the attitudes taken by member states in regard to jurisdictions not applying minimum standards in the area concerned. To assess the need for possible further initiatives, the Commission announced that it will re-evaluate member states' approach and actions in this area within three years after the adoption of the Recommendation.

A Recommendation on aggressive tax planning, which suggests ways to address legal technicalities and loopholes which some companies exploit to avoid paying their fair share. Member states are encouraged to reinforce their Double Tax Conventions, to prevent them from resulting in no taxation at all. They should also adopt a common General Anti-Abuse Rule, under which they could ignore any artificial arrangement carried out for tax avoidance purposes and tax instead on the basis of actual economic substance.

The establishment of a Platform for Tax Good Governance composed of experts from member states and stakeholders representatives to provide assistance in preparing its Report on the application of the two Recommendations.

In line with what is set out above and as indicated already in the Annual Growth Survey 2012, the Commission further points out the urgent need for a new impetus to be given to the work that is currently discussed in the context of the Code of Conduct for business taxation.

The launch of a new practical instrument, TIN on EUROPA portal, to improve administrative co-operation in the area of direct taxation. This application provides samples of official identity documents containing national tax identification numbers (TIN). It therefore allows any third party, and in particular financial institutions, to quickly, easily and correctly identify and record TINs in cross-border relations.

The adoption, on 6 December 2012, of an Implementing Regulation providing standard forms for exchange of information in the field of taxation.

The modifications that will be adopted in December 2012 in the area of denaturants encompass a common EU formulation for the complete denaturing of alcohol. The main objective is to reduce opportunities for fraud.

A revision of Council Directive 2011/96/EC of 30 November 2011 on the common system of taxation applicable in the case of parent companies and subsidiaries of different member states with the objective to ensure that the application of the Directive does not inadvertently prevent effective action against double non-taxation in the area of hybrid loan structures.

A review the anti-abuse provisions of Council Directive 2003/49/EC of 3 June 2003 on a common system of taxation applicable to interest and royalty payments made between associated companies of different member states and Council Directive 2009/133 of 19 October 2009 on the common system of taxation applicable to mergers, divisions, partial divisions, transfers of assets and exchanges of shares concerning companies of different member states and to the transfer of the registered office of an SE or SCE between member states, with a view to implement the principles underlying its Recommendation on aggressive tax planning.

The promotion of the standard of automatic exchange of information in international fora and the EU IT tools.

The development of a European taxpayer's code, setting out best practices for enhancing co-operation, trust and confidence between tax administrations and taxpayers, for ensuring greater transparency on the rights and obligations of taxpayers and encouraging a service-oriented approach. The Commission plans to launch a public consultation on this at the beginning of 2013.

Reinforce co-operation with other law enforcement bodies. The Commission will present both a review of the Third Anti-Money Laundering Directive and a specific Directive on combating money laundering.

The promotion of the use of simultaneous controls and the presence of foreign officials for audits.

Request for an authorisation from Council to start negotiations with third countries for bilateral agreements on administrative co-operation in the field of VAT.

The development of new formats for automatic exchange of information on income from employment, directors' fees, life insurance products, pensions and on ownership of and income from immovable property, pursuant to Directive 2011/16/EU.

The Use of the EU TIN. As a first step, the Action Plan notes that a possibility would be to further develop the TIN on EUROPA portal, by making it possible to check the validity of national TINs by linking this application with member states' databases.

The launch of a process to rationalise the IT instruments across Europe with a view to ensuring more effective and cost-efficient systems.

The development of a common methodology and Guidelines to improve access to information on money flows by tax administrations, for example via credit cards and EU/offshore bank accounts, making it easier to trace significant transactions.

The extension of EUROFISC to direct taxation.

The creation of a one-stop-shop approach in all member states to deliver all types of tax information to taxpayers, including non-residents, therefore facilitating cross border operations by eliminating tax obstacles and therefore, ensuring better tax compliance.

The development of common methodologies and Guidelines to enhance educational measures, with a view to raising taxpayers' awareness on the powers of tax administrations to obtain information from other countries.

The improvement and, where possible, extension of the existing Tax on EUROPA web portal, in order to improve access to reliable tax information in cross-border situations.

Study the opportunity and feasibility to align the definition of certain types of tax offences, including administrative and criminal sanctions for all types of taxes.

The development of an EU Standard Audit File for Tax along the lines of what is already in force or under development in certain member states.

The development of a methodology for joint audits by dedicated teams of trained auditors.

Analyse the feasibility of facilitating direct access to national databases in the realm of direct taxation.

Study the feasibility, from legal and practical points of view, of having a single legal instrument for administrative co-operation for all taxes, instead of four different instruments, as currently exist.

European Commission: Communication, An Action Plan to strengthen the fight against tax fraud and tax evasion (COM (2012) 722) (6 December 2012).

European Commission: Recommendation 2012/772/EU of 6 December 2012 on aggressive tax planning (C (2012) 8806) (6 December 2012):OJ 2012 L 338/41.

European Commission: Recommendation 2012/771/EU of 6 December 2012 regarding measures intended to encourage third countries to apply minimum standards of good governance in tax matters (C (2012) 8805) (6 December 2012): OJ 2012 L 338/37.

European Commission: Press release, Clamping down on tax evasion and avoidance: Commission presents the way forward (IP/12/1325) (6 December 2012).

European Commission: Memo, tax evasion and avoidance: Questions and Answers (MEMO/12/949) (6 December 2012).

EurActiv: News article, Commission moves to close tax fraud, evasion loopholes (7 December 2012).