Monday

11th Dec 2017

EU moving toward common ‘blacklist’ of tax havens

EU member states sent a letter to 92 countries on Wednesday (1 Februray) informing them that they will be “screened” with a view to inclusion in a future “blacklist” of tax havens.

The list of the countries that have been contacted is not public, but EUobserver understands that it is largely based on preliminary research done by the European Commission in September 2016.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

That would mean it probably includes countries such as Canada, Bermuda, Israel, and the United States.

Developing countries with important financial centres, such as Mauritius, also likely feature on the list, as well as some UK dependencies such as Jersey, Guernsey, and the Isle of Man.

In the letter, member states insisted that this first contact does not mean that the 92 countries will end up on the final list.

“It should be emphasised that the selection of jurisdictions for the 2017 screening process was based on a set of objective indicators (such as strength of economic ties with the EU, financial activity and stability factors) and that this selection does not prejudge the outcome of this process,” said one version of the letter, seen by EUobserver.

Zero corporate rate

Member states’ experts now have to examine the 92 countries, and possibly to engage in a “dialogue” with each of them, to decide whether they should figure on the final list.

This might be complicated, as member states have no definitive agreement on the criteria that will determine whether a country appears on the blacklist.

At a meeting in November 2016, EU finance ministers agreed that to avoid being on the future blacklist, third countries would have to comply with international transparency standards, avoid “preferential tax measures” or rules facilitating “offshore structures”, and implement a global plan against tax avoidance drawn up by the OECD, a club of industrialised states.

But they could not agree whether a “zero or almost zero” corporate tax rate was a measure facilitating “offshore structures”.

“Member states generally agree that the absence of a corporate tax system, zero or almost zero rate of taxation does not automatically mean that a jurisdiction encourages offshore activities,” says an internal EU working document on the issue seen by EUobserver.

“However, there is evidence that jurisdictions that facilitate offshore structures or arrangements typically have no or very low corporate income tax and that they capture large amounts of financial flows.”

Experts were supposed to solve this issue in January, but the decision has been pushed back to a technical meeting due to take place on Friday (3 February).

Time running out

Asked why they did not wait to have an agreement before sending the letter, officials answered that they wanted to move forward rapidly.

The list needs to be finalised by the end of the year, and experts also have to decide the measures that will be taken against jurisdictions that end up on the list.

“We have to keep the process moving,” said an EU source. “The zero corporate tax rate is only a detail, compared to what has already been agreed.”

EU states set to oppose tax transparency bid

A compromise text by the Slovak EU presidency is proposing to water down the commission's plans to allow public access to the names of those who own offshore accounts.

Investigation

Inside the Code of Conduct, the EU's most secretive group

The informal group of national officials that is in charge of checking EU countries' tax laws is now working on the first EU blacklist of tax havens, amid critiques over its lack of transparency and accountability.

EU commission wants 'credible' tax haven blacklist

The EU's finance commissioner Pierre Moscovici told reporters that he wants a credible EU blacklist of tax havens following the latest media tax avoidance revelations of the wealthy elite in the Paradise Papers.

Stakeholders' Highlights

  1. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  2. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  3. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  4. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  5. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  6. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  7. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  8. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  9. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties
  10. EPSUEU Blacklist of Tax Havens Is a Sham
  11. EU2017EERole of Culture in Building Cohesive Societies in Europe
  12. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage