The European Commission last month announced recommendations and action plans to counter tax avoidance and tax evasion. However, the Commission's initiative will involve nothing new for Ireland as the Irish tax compliance environment is just as rigorous for cross-border transactions as for domestic tax compliance. Even by the analysis presented by the Commission, Ireland has one of the smallest Black Economies in Europe – we rank ahead of Germany, Belgium and the Nordic countries in our levels of tax compliance.

For existing OECD member countries like Ireland, there is little that is new in the EU package that has not already been recommended and implemented by the OECD. One of the key recommendations is that EU Member States should maintain a blacklist of less than compliant countries – such a listing and ranking has been maintained by the OECD for several years. Similarly, the Commission recommends the adoption by EU Member States of rules to allow for artificial arrangements to avoid tax to be ignored. Ireland has had such a rule since 1989, and it is vigorously enforced by Revenue.

While any initiatives to counter tax evasion are to be welcomed, the EU has been less than successful in recent times at promoting tax initiatives. For example, talks on developing and extending the EU's flagship initiative against tax evasion, the Savings Directive, have stalled on several occasions in the last 12 months. The main merit of the current package may be to lead Member States of the European Union which are not also OECD Member States towards better compliance and enforcement standards. These announcements therefore will have little practical consequences for Ireland.

Full details of the Commission's press release are available on the Europa website www.europa.eu/.