Panama and UK Cayman Islands added on EU blacklist for tax havens


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Finance ministers today added four countries to the EU’s blacklist for tax havens outside the bloc, including Panama and U.K. territory Cayman Islands. Ministers updated the naming and shaming exercise at the EU finance ministers meeting in Brussels, adding the four new countries to the existing eight-country list. Palau and Seychelles were the other two new entrants.

The blacklist in full includes: American Samoa, Cayman Islands, Fiji, Guam, Oman, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, U.S. Virgin Islands and Vanuatu. Blacklisting the Cayman Islands, a British overseas territory, should be a warning to the U.K. in the context of post-Brexit talks between London and Brussels, German conservative lawmaker Markus Ferber said in a statement.

Ministers today also updated the EU’s graylist, which includes countries that have promised to correct their tax practices to avoid the blacklist. Graylist countries include: Anguilla, Australia, Bosnia and Herzegovina, Botswana, Eswatini, Jordan, Maldives, Mongolia, Morocco, Namibia, Saint Lucia, Thailand, Turkey.

“This sends a clear signal that the idea of turning the UK into a tax haven will not be acceptable to the EU,” said Ferber, a member of the European People’s Party. EU governments first introduced the blacklist in December 2017 with 17 countries after a series of tax dodging scandals, such as the Panama Papers, which revealed to what extent companies and individuals have gone to avoid paying their fair dues.

The list of non-cooperative tax jurisdictions, which is part of the EU’s external strategy for taxation as defined by the Council, is intended to contribute to ongoing efforts to promote tax good governance worldwide.

It was first established in December 2017 and is based on a continuous and dynamic process of:

  • establishing criteria in line with international tax standards;
  • screening countries against these criteria;
  • engaging with countries which do not comply;
  • listing and de-listing countries as they commit or take action to comply;
  • monitoring developments to ensure jurisdictions do not backtrack on previous reforms.

The list includes jurisdictions that have either not engaged in a constructive dialogue with the EU on tax governance or failed to deliver on their commitments to implement reforms to comply with the EU’s criteria on time.

Jurisdictions that do not yet comply with all international tax standards but committed to reform are considered cooperative and included in a state of play document (Annex II). The Council’s code of conduct group on business taxation monitors that jurisdictions enact the necessary reforms by the agreed deadlines. Once a jurisdiction meets all its commitments, it is removed from Annex II.

Most commitments taken by third country jurisdictions were with a deadline of end 2019, whilst their enactment in national law was carefully monitored at technical level by the Code of Conduct Group on business taxation until the beginning of this year. The Council adopted the revised EU list of non-cooperative jurisdictions resulting from this exercise and endorsed a revised state of play with respect to pending commitments.

The Council will continue to regularly review and update the list in the coming years, taking into consideration the evolving deadlines for jurisdictions to deliver on their commitments and the evolution of the listing criteria that the EU uses to establish the list.

In parallel, as regards ‘defensive’ measures with regard to the listed jurisdictions, the Council produced a guidance on further coordination of national defensive measures in the tax area towards non-cooperative jurisdictions in December 2019. It invited all member states to apply legislative defensive measure in taxation vis-à-vis the listed jurisdictions as of 1 January 2021, with the aim of encouraging those jurisdictions’ compliance with the Code of Conduct screening criteria on fair taxation and transparency.

Via Politico / European Parliament 

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