EU FINANCE MINISTERS TO DISCUSS MAKING ‘BLACKLIST’ OF TAX HAVENS

EU states will today discuss plans for a tax havens’ blacklist, in a bid to tackle offshore tax avoidance.

The subject’s inclusion on the monthly meeting’s agenda of EU finance ministers follows the leaking of the Paradise Papers.

The latest revelations ‘put renewed emphasis on the work the European Commission is doing to fight tax avoidance’, the vice president of the EU’s executive arm, Valdis Dombrovskis, told reporters yesterday.

EU countries have planned for months to reach an agreement on a blacklist for tax havens by the end of this year. The new revelations prompted the discussion to be brought forward, EU officials said.

The EU has discussed several measures to crack down on tax avoidance, including in the wake of the Panama Papers, a similar release last year which chronicled a shadowy world of offshore holdings and hidden wealth. Measures proposed by the European Commission include an EU-wide list of tax havens meant to discourage the rerouting of profits made in the EU to tax-free or low-tax countries, like Panama or Bermuda.

At the moment, each EU state has its own list of jurisdictions that are seen as less cooperative on tax matters. Criteria to define a tax haven vary greatly among EU states and some of them omit any jurisdictions in their national blacklists. An EU-wide blacklist is believed to carry more weight. Jurisdictions included in the list could be subject to sanctions if they did not cooperate.

‘It’s time that we agree and publish a blacklist on tax havens,’ EU tax commissioner Pierre Moscovici told reporters, calling for a ‘credible’ list and ‘adequate sanctions’ when serious breaches are unveiled. There are no details yet of the type of sanctions that could be imposed, although being on the blacklist in itself could discourage individuals and companies from putting money in those jurisdictions.