Thursday

13th Aug 2020

EU commission wants 'credible' tax haven blacklist

  • Pierre Moscovici seeks a 'credible' EU blacklist of tax havens. (Photo: European Commission)

The European Commission is demanding that member states reach an agreement on an EU tax haven black list, in the wake of media revelations of widespread tax avoidance schemes by the wealthy elite known as the Paradise Papers.

Pierre Moscovici, the EU finance commissioner, told reporters on Monday (6 November) that governments needs to "rapidly adopt a European tax haven list", which is also "credible."

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"There is no point in just having one country on the black list tax havens," he said.

Speaking at a eurozone meeting in Brussels, Moscovici said the latest disclosures prove that some "companies and rich individuals are ready to do anything to not pay tax."

He noted EU commission proposals to crack down on aggressive tax planning by bankers, lawyers, and law firms needed to be moved forward.

Although not a single EU state will appear on the list, capitals have been reluctant given that some of their own jurisdictions are themselves offshore entities.

Discussions on the matter are being held behind closed doors by a so-called Code of Conduct Group on business taxation, set up by member states in 1990.

Instead, around 92 other jurisdictions had earlier this year been sent letters as an initial screening to see if they comply with the rules.

Of those, the Financial Times newspaper reports some 53 countries and territories have recently been warned to clean up their tax code or risk being on the December list.

Some of those are linked to UK overseas territories like Bermuda and the Cayman Islands.

"The British are particularly sceptical about the EU's black list of tax havens, for self-protection," said German Green MEP Sven Giegold, in a statement.

He described Britain and its overseas territories as one of the world's largest tax havens, noting the Caribbean islands offer a zero percent corporate tax rate.

A similar list was first published in 2015 and had excluded known corporate tax havens like the Netherlands, Luxembourg, Ireland, Malta and the UK.

The US and Switzerland were not listed either but instead posted jurisdictions in some of the world's most impoverished states.

Such moves are said to render the list highly politicised given it protects the harmful tax practices of wealthy states.

Luxembourg's prime minister Xavier Bettel has also denied his country being a tax haven, telling EUobserver in June that tax policy is a national issue.

"Why should I be less competitive?," he said.

Malta denies secrecy in 'Paradise Papers' leak

Malta's finance minister Edward Scicluna told reporters that the Maltese-based entities named in the latest tax avoidance leaks are all listed on a public register. "There was no secrecy whatsoever," he said.

MEPs ponder how to fight tax havens

After the Paradise Papers brought new revelations about tax dodging across the globe, including in the EU, the European Parliament wonders how to step up the fight.

EU blacklists 17 tax havens, avoids sanctions

Finance ministers pointed out 'non-cooperative' entities and set up a second 'grey' list of more than 40 countries that have promised to improve their tax practices.

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