EU release list of tax havens & blacklisted jurisdictions for the first time
In an attempt to recover the approximate 600B euros lost within various EU countries to tax evasion schemes each year; the European Union has released its first official blacklist naming 17 jurisdictions that have failed to meet international standards of implementing sufficient regulations and transparency measures.
The publication has been a good first step however criticised by experts as an insufficient response to the global tax evasion epidemic as no penalties have been agreed upon. Applying a withholding tax on money going to the listed countries was discussed as a potential sanction however not approved.
The full blacklist includes the following jurisdictions:
- South Korea.
- The Marshall Islands.
- United Arab Emirates.
- Trinidad & Tobago.
- American Samoa.
- US territory Guam.
- St Lucia.
There are a further 47 on a grey list, some of which include British overseas territories & UK crown dependencies such as:
- The Isle of Man.
- And Jersey.
- The Cayman Islands.
The grey list are those who have shown some willingness to reform their current tax organisations. A commended measure is to demonstrate that their local companies are not using 0% corporate tax rates to hide their profits. Developed countries on this list will have until the end of next year to complete their commitments to reform, while third world countries have been given until the end of 2019 before they will be put on the official blacklist.
The proposed timeline for future implications so tax havens do not continue to fly under the EUs radar:
- 3 months’ time: examine the situation of the countries affected by hurricanes that have had more pressing matters to worry about.
- 6 months’ time: review progress on all the commitments made by grey listed jurisdictions.
- Within a year: decide upon appropriate sanctions for those countries still on the blacklist.
Commentary on the Lists
“Today’s publication marks a vital step in our ongoing efforts to tackle international tax evasion. This is clearly working, as over 40 jurisdictions have made noteworthy commitments to reform as part of this process.”
- The UK Treasury.
However concerns have been voiced that the EU had seemingly only reprimanded smaller countries and UK dependencies on a mere grey list.
“It is troubling to see mostly small countries on the EU blacklist, while the most notorious tax havens got away on the grey list. The EU has to ensure governments on the grey list follow up on their commitments, or else they must be blacklisted.”
- Oxfam’s EU policy adviser on tax inequality.
“It is disappointing that UK overseas territories and crown dependencies mentioned as merely being on a grey list from the EU in its tax haven blacklist. The UK government has not earned itself many allies by trying to protect certain jurisdictions during this process.”
- UK Minister of Parliament Anne Dodds.
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