Thursday

22nd Feb 2024

Russia added to EU tax-haven blacklist, Qatar gets more time

  • EU ministers of finance and economy updated the list to add British Virgin Islands, Costa Rica, Marshall Islands, and Russia (Photo: Unsplash)
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The so-called EU tax-haven blacklist was updated on Tuesday (14 February) by EU ministers of finance and economy to add British Virgin Islands, Costa Rica, Marshall Islands, and Russia.

"The inclusion of Russia to the tax blacklist shows the EU is able to take strong decisions when the political context is right," said Ernest Urtasun, Green MEP and coordinator in the economic and monetary affairs committee.

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President Vladimir Putin had failed to resolve Russia's "harmful" preferential tax regime for international holding companies, according to the rationale for listing.

But while Russia has been added to the blacklist, Qatar has gained more time to adapt to international standards.

Although the EU Commission had pushed for the inclusion of Qatar, EU finance ministers decided to leave it out.

The council has granted the Gulf state an extension until 31 March 2023 to bring its legislation into line with international fair taxation standards.

The justification? Qatar "faced constitutional reform constraints and demonstrated tangible progress in 2022", says the conclusions.

Urtusan was blunt on this point. "The fact that Qatar has remained on the grey list, as a result of pressure from certain large member states, demonstrates just how politicised the list is", he commented.

In the midst of the Qatargate scandal engulfing the European Parliament, Urtasun also called on the ministers of the EU-27: "The Council must be brave, proactive, and diligent in its approach to putting countries on the blacklist and not only act when the political climate allows it".

The 'joke list'?

For Oxfam EU's tax expert, Chiara Putaturo, the document was a "joke list".

She sees the update as a missed opportunity to put an end to tax havens once and for all and to tackle the inequality between the super-rich and ordinary people.

Putaturo does not think it is a bad tool — just that it should be more coherent and effective, and not used for "political gains", she told EUobserver.

In overview, four countries have entered the blacklist, and four have left the grey list—composed of those that have responded to the EU with sufficient commitments to tax reforms.

North Macedonia, Barbados, Jamaica, and Uruguay can already be removed from the document "as they successfully fulfilled their commitments," in the words of the Swedish ministry of finance, which currently holds the rotating EU presidency.

Following the changes, the uncooperative tax regimes blacklist now contains 16 jurisdictions, including Fiji, Panama, and the Bahamas.

Bahamas is staying on as it "facilitates offshore structures and arrangements aimed at attracting profits without real economic substance," the Council said.

Yet the list does not include others like the Cayman Islands, despite its zero corporate tax regimes, the Oxfam EU's tax expert commented.

Putaturo also drew attention to some EU countries, like Luxembourg -"one of the most harmful tax havens in the world"- or Malta, who did not comply with the transparency criteria needed, she explained.

Since 2020, the list has been updated twice a year and aims to promote an international framework that prevents tax-base erosion and profit shifting, and promotes transparency and fair taxation.

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