Tuesday

16th Aug 2022

Cayman Islands put on tax-haven blacklist after Brexit

  • Critics say the EU's tax-haven blacklist ignores some of the biggest culprits (Photo: Oxfam)

British overseas territory the Cayman Islands has been placed on an EU tax-haven blacklist, along with Palau, Panama, and the Seychelles.

The latest decision made by finance ministers on Tuesday (18 February) follows the UK's departure last month from the European Union. Ministers say it was listed because investment funds based there do not reflect real economic activity.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

But when asked why it took almost three years for the Cayman Islands to be listed, the EU appeared to eschew the question - saying the main purpose of the blacklist was to create dialogue to improve tax governance on the islands.

"Through the creation of this list we wanted to encourage and I would say in a way enhance cooperation and coordination, [and] dialogue," Croatia's finance minister Zdravko Maric, who was speaking on the behalf the EU's rotating presidency, told reporters in Brussels.

Set up in 2017 in response to revelations of widespread tax evasion schemes, the blacklist now totals some 12 jurisdictions. The other listed territories include American Samoa, Fiji, Guam, Oman, Samoa, Trinidad and Tobago, US Virgin Islands, and Vanuatu.

Tax Justice Network, an NGO, estimates some €500bn is lost each year in dodged corporate tax. Last year, it ranked the Cayman Islands in the top-ten corporate tax havens in the world.

World's biggest still off the hook

But critics say the EU blacklist still neglects the biggest tax-evading jurisdictions.

Oxfam, an international NGO, said it should have included the Bahamas, Bermuda and the British Virgin Island.

It notes all three offer zero-tax rates, or very low tax rates, so that companies avoid paying their fair share in corporate taxes.

In addition, it says some 30 percent of the $600bn [€555bn] in profits made by foreign multinationals in 2015 were shifted into EU member state tax-havens like Ireland, Luxembourg and the Netherlands.

When pressed about the exemption of EU states, Maric said national legislation is supposed to be in place. "All the legislation in respect to the tax system is supposed to be fully aligned," he said of the member states.

He further noted that the tax systems of 95 countries had been examined, with most of them complying with the EU standards. Another 120 harmful tax regimes have also been eliminated because of the oversight, he said.

But some, like Sven Giegold, a German Green MEP, said both Turkey and the United States should also have made the list anyway.

"The USA in particular is inviting tax evasion via anonymous letterbox companies and depots," he said, in a statement.

The EU blacklist aims to shame those who neglect good tax governance, impose greater scrutiny on financial transactions, and limit access to the EU funds. The list is set to be reviewed again in October.

Luxembourg not a tax haven, claims PM

The prime minister of Luxembourg, Xavier Bettel, maintains that his country had broken no rules and committed no crime when issuing rulings that slashed global tax bills for the big firms.

Dutch minister draws fire on EU and tax-havens

Dutch finance minister Wopke Hoekstra should excuse himself from an EU decision on tax-havens after he was named in the 'Pandora Papers' revelations, a leading MEP has said.

Opinion

German presidency's broken promises on 'fair tax'

At the start of the German presidency of the EU Council it committed itself to a "fair taxation" agenda. But as we enter the final leg of its six-month term, time is running out to make good on this promise.

Brazil pitches itself as answer to Ukraine war food shortages

Brazilian president Jair Bolsonaro is pitching his Latin American country as the answer to the world food crisis following the war in Ukraine. The traditional wheat importer has now exported three million tonnes of the grain so far in 2022.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  2. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  3. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  4. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  5. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  6. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis

Latest News

  1. Germany rejects visa ban for Russian tourists
  2. Iran responds to EU's 'final text' on nuclear deal
  3. Model minority myths
  4. EU must make public who really owns its fishing fleets
  5. Germany needs to cut gas use by 20% to stave off winter crisis
  6. Europe's wildfire destruction set to hit new record
  7. How Putin and Erdoğan are making the West irrelevant
  8. Defying Russian bombs, Ukraine football starts 2022 season

Join EUobserver

Support quality EU news

Join us