First tax havens blacklist published by EU

The European Union has revealed its first blacklist of tax havens, naming 17 territories together with Saint Lucia, Barbados and South Korea.

A “watchlist” of 47 international locations promising to vary their tax guidelines to satisfy EU requirements has additionally been issued.

The “gray checklist” consists of a number of with UK hyperlinks, together with Hong Kong, Jersey, Bermuda and the Cayman Islands, in addition to Switzerland and Turkey.

Both lists have been criticised as omitting essentially the most infamous tax havens.

The lists comply with the leaking of the Panama Papers and the Paradise Papers, revealing how corporations and people hid their wealth from tax authorities world wide in offshore accounts.

EU tax commissioner Pierre Moscovici stated the blacklist represented “substantial progress”, including: “Its very existence is a crucial step ahead. However as a result of it’s the first EU checklist, it stays an inadequate response to the dimensions of tax evasion worldwide.”

To find out whether or not a rustic is a “non-cooperative jurisdiction” the EU index measures the transparency of its tax regime, tax charges and whether or not the tax system encourages multinationals to unfairly shift income to low tax regimes to keep away from greater duties in different states. Particularly these embody tax methods that supply incentives comparable to zero% company tax to overseas corporations.

EU members have been left to resolve what motion to take in opposition to the offenders. Ministers dominated out imposing a withholding tax on transactions to tax havens in addition to different monetary sanctions.

Some states, comparable to Luxembourg and Malta, opposed stricter sanctions, in keeping with officers. EU Fee Vice-President Valdis Dombrovskis stated “stronger countermeasures would have been preferable”.

Panama is likely one of the 17 international locations listed by the EU however its president, Juan Carlos Varela, stated the nation was “not in any manner a tax haven”.

The EU is encouraging member states to take what it calls “defensive actions” in opposition to these international locations that don’t reform their tax methods.

The UK-based charity Oxfam final week revealed its personal checklist of 35 international locations that it stated needs to be blacklisted.

Oli Pearce, Oxfam’s inequality and tax coverage advisor, stated: “It’s disturbing to see largely small international locations on the EU blacklist, whereas essentially the most infamous tax havens – UK-linked locations like Bermuda, the Cayman Islands, Jersey and the Virgin Islands – escape with a spot on the ‘gray checklist’.

“Though we recognise it is a step in the appropriate course, if EU leaders let too many tax havens off the hook we’ll all lose out. A spot on the gray checklist should not imply tax havens get off scot-free.”

Nevertheless, tax campaigner Richard Murphy stated some international locations on the gray checklist might nonetheless face heavy sanctions in the event that they did not reform their tax methods.

He stated EU international locations might be inspired to disallow funds made to those locations for tax functions, or to cost withholding taxes on curiosity funds to them.

That tactic might “completely neuter their so-called standing as ‘tax impartial worldwide monetary centres’ by guaranteeing that every one monies they obtain have been taxed earlier than getting there”, Mr Murphy stated.

“The EU can also be saying to the UK that it’s taking actual measures in opposition to British Abroad Territories and Crown Dependencies, and the message is – in case you go the identical manner as them with an analogous low-tax regime after Brexit, you may be sanctioned too.”


The 17 blacklisted territories are:

  • American Samoa
  • Bahrain
  • Barbados
  • Grenada
  • Guam
  • South Korea
  • Macau
  • The Marshall Islands
  • Mongolia
  • Namibia
  • Palau
  • Panama
  • Saint Lucia
  • Samoa
  • Trinidad and Tobago
  • Tunisia
  • United Arab Emirates

The EU made exceptions for international locations confronted with pure disasters comparable to hurricanes, and put the method briefly on maintain.


Printed at Tue, 05 Dec 2017 19:07:19 +0000