Monday

19th Nov 2018

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.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

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.”

Malta rejects tax haven accusations

Finance minister Scicluna said that a report published by Green MEPs was "unfair" and that Malta had "nothing to hide".

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.

News in Brief

  1. Ireland extradites Polish man despite rule of law concerns
  2. Germany and France agree eurozone budget framework
  3. Austrian foreign minister: EU's Israel policy 'too strict'
  4. Soros and Kurz discuss Central European University move
  5. EU set to tighten rules on foreign strategic investment
  6. Macron repeats call for unified Europe in Bundestag speech
  7. US warns EU banks and firms against trading with Iran
  8. Merkel urged Romania not to move embassy to Jerusalem

Opinion

Interpol, China and the EU

China joins a long list of countries - including Russia - accused of abusing Interpol's 'Red Notice' system to harras activists and dissidents.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Panic is not answer to EU's security challenges
  2. Dutch flesh out proposal for EU human rights sanctions
  3. EU cheerleaders go to Russia-occupied Ukraine
  4. EU must recognise new force for Balkans destabilisation
  5. Brexit dominates EU affairs This WEEK
  6. How the EU commission got tunnel vision on self-driving cars
  7. No-confidence calls against May put Brexit deal in doubt
  8. Key points of the Brexit deal (if it ever comes into effect)

Join EUobserver

Support quality EU news

Join us