EU tax havens blacklist seen in December, but enforcement unclear

BRUSSELS, (Reuters) - European Union finance ministers called yesterday for a blacklist of tax havens to be drawn up for approval next month as part of kick back against what it sees as tax dodging by the rich and famous.

Underlining the difficulty of such an approach, however, they were divided over how to impose sanctions on countries that help tax avoidance, which is often legal.

The ministers made the issue the main topic of their monthly meeting after release of the “Paradise Papers”, a trove of financial documents mostly from offshore law firm Appleby. The papers made public the tax affairs of numerous companies and investors.

To reduce the appeal of jurisdictions that charge little or no taxes, EU ministers discussed plans for a common blacklist that would shine the light on such countries.

“There was strong support for the idea of moving forward quickly,” Estonia’s Finance Minister Toomas Tõniste, who holds the EU’s rotating presidency, told reporters.

He added that “most countries” wanted the adoption of the list next month, tacitly acknowledging however that not all the 28 EU member states were equally keen to go that fast.

Jurisdictions in the limelight include offshore banking centres such as Jersey and Bermuda. But some EU countries, notably Luxembourg and Malta have also been criticised for acting as tax havens.

The main sticking point for the EU is whether blacklisted countries should be subject to sanctions.

“I am not sure if there will be sanctions,” an EU official said, citing differences among member states, who need to unanimously back proposals on tax matters.