Sunday

24th Mar 2019

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. EU leaders at summit demand more effort on disinformation
  2. Report: Corbyn to meet May on Monday for Brexit talks
  3. Petition against Brexit attracts 2.4m signatures
  4. Study: Brexit to cost EU citizens up to €40bn annually
  5. NGOs demand France halt Saudi arm sales
  6. Report: Germany against EU net-zero emissions target
  7. Former top EU official takes job at law firm
  8. Draft text of EU summit has Brexit extension until 22 May

Stakeholders' Highlights

  1. Nordic Council of MinistersNew campaign: spot, capture and share Traces of North
  2. Nordic Council of MinistersLeading Nordic candidates go head-to-head in EU election debate
  3. Nordic Council of MinistersNew Secretary General: Nordic co-operation must benefit everybody
  4. Platform for Peace and JusticeMEP Kati Piri: “Our red line on Turkey has been crossed”
  5. UNICEF2018 deadliest year yet for children in Syria as war enters 9th year
  6. Nordic Council of MinistersNordic commitment to driving global gender equality
  7. International Partnership for Human RightsMeet your defender: Rasul Jafarov leading human rights defender from Azerbaijan
  8. UNICEFUNICEF Hosts MEPs in Jordan Ahead of Brussels Conference on the Future of Syria
  9. Nordic Council of MinistersNordic talks on parental leave at the UN
  10. International Partnership for Human RightsTrial of Chechen prisoner of conscience and human rights activist Oyub Titiev continues.
  11. Nordic Council of MinistersNordic food policy inspires India to be a sustainable superpower
  12. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID

Latest News

  1. Italy takes China's new Silk Road to the heart of Europe
  2. What EU leaders agreed on climate - and what they mean
  3. Copyright and (another) new Brexit vote This WEEK
  4. EU avoids Brexit crash, sets new date for 12 April
  5. Campaigning commissioners blur the lines
  6. Slovakia puts squeeze on free press ahead of election
  7. EPP suspends Orban's Fidesz party
  8. Macron is confusing rigidity with strength

Join EUobserver

Support quality EU news

Join us