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7th Dec 2022

Bermuda and BVI face EU pressure on tax reform

  • Bermuda, which will now be on an EU grey-list (Photo: Mike Oropeza)
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​The European Union is expected to add Bermuda, the British Virgin Islands (BVI), Israel and Russia to a so-called grey-list of tax-havens, according to a draft version seen Wednesday (9 February) by EUobserver.

The grey-list, which is to grow from 15 to 25 jurisdictions, is to be adopted by EU ministers on 24 February, the EU Council said.

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  • The British Virgin Islands: the British protectorate was at the heart of the Panama Papers revelations (Photo: JaguarJulie)

Countries included in the list are judged by the EU not to have met promises on tax reform. Inclusion also can represent a public relations headache for those listed.

The grey-list is published alongside a so-called blacklist of the worst-offenders that face EU sanctions. But the blacklist is expected to stay unchanged this month.

Tax-reform campaigners cautiously applauded the news.

"If the [new] grey-listing ... is confirmed, we will see some real tax-havens finally at risk to be blacklisted [in future]," Chiara Putaturo of Oxfam told EUobserver.

She said the inclusion of 10 more countries on the grey-list was due to a modification of the EU criteria.

"However, there are still other tax havens that are left off the hook ... such as the Cayman Islands, because the criteria remain weak," she said.

There were 676 BVI-registered offshore companies in Pandora Papers last year - the latest in a line of leaks revealing the scale of global tax evasion.

The second highest number - 102 - was in Panama, a country that is already on the EU blacklist.

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Hungarian and Estonian diplomats have blocked a revised set of tax rules, potentially derailing an effort to curb the race for ever-lower corporate taxes in the EU.

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