Professional services firms that facilitate ‘illegal, harmful or wrongful corporate tax arrangements’ – even involving legal vehicles – should face sanctions, the European Parliament has said. 

In strongly worded recommendations to the Council of Ministers and European Commission following an inquiry into money laundering, tax avoidance and tax evasion, the parliament says lawyers’ professional confidentiality should not impede adequate suspicious transaction reports or the reporting of other potentially illegal activities.

It stresses ‘that there is a need to be vigilant’ to ensure that Brexit does not encourage tax competition between the 27 remaining member states.