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1st Jul 2022

EU states crack down on tax evasion

France and Germany are boosting efforts to curb tax havens in Europe, with Berlin suggesting Switzerland should be added to a blacklist run by the Organisation for Economic Cooperation and Development (OECD), the Paris-based think-tank of the world's 30 richest countries.

The two countries along with 15 other states participated in a meeting in Paris dedicated to the controversial issue on Tuesday (21 October) and urged the OECD to revise the current list of 40 countries regarded as "tax havens."

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  • Swiss cheese: the EU is seeking new ways to prevent tax evasion in countries well-known for their bank secrecy (Photo: Wikipedia)

Looking at Europe, the list now includes only three mini-states in Western Europe - Lichtenstein, Andorra and Monaco.

But German finance minister Peer Steinbruck insisted at the Paris meeting that "Switzerland offers conditions that prompt German taxpayers to evade taxes" adding "Switzerland belongs on the blacklist," according to AP.

Bern refused to take part in the event and the 7.6-million country has also been resisting attempts by the European Union to relax its bank secrecy legislation, along with EU member states Austria and Luxembourg.

The tax haven issue came under the spotlight earlier this year following reports on a massive tax fraud in Germany, which involved Liechtenstein and some 1,400 individuals, including 600 German citizens.

The German people had set up funds in the tiny principality in order to avoid taxes in their home countries. Overall, Germany claims it loses as much as €30 billion each year in tax fraud.

In May, EU finance ministers gave their political blessing to an overhaul of the bloc's rules on savings tax, in a bid to clamp down on tax havens by improving the exchange of information between banks on a wider range of financial products and also for legal persons not just private individuals.

But as the financial crisis led to calls for more regulation in the financial system, Berlin and other capitals have also resumed their effort to achieve a more resolute clamp-down on tax havens on a global level.

As a result of Tuesday's Paris meeting, the OECD promised to complete the tax havens list by mid-2009. Berlin is planning to host a conference to consider how to deal with the listed countries. Switzerland is one of the 30 member states of the OECD.

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