First tax havens blacklist published by EU

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The European Congruity has published its first blacklist of tax havens, naming 17 territories numbering Saint Lucia, Barbados and South Korea.

A «watchlist» of 47 sticks promising to change their tax rules to meet EU standards has also been issued.

The «overcast list» includes several with UK links, including Hong Kong, Jersey, Bermuda and the Cayman Cays, as well as Switzerland and Turkey.

Both lists have been criticised as skipping the most notorious tax havens.

The lists follow the leaking of the Panama Analyses and the Paradise Papers, revealing how companies and individuals hid their wealth from tax officials around the world in offshore accounts.

EU tax commissioner Pierre Moscovici claimed the blacklist represented «substantial progress», adding: «Its very existence is an portentous step forward. But because it is the first EU list, it remains an insufficient return to the scale of tax evasion worldwide.»

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To determine whether a country is a «non-cooperative jurisdiction» the EU list measures the transparency of its tax regime, tax rates and whether the tax system encourages multinationals to unfairly get profits to low tax regimes to avoid higher duties in other states. In individual these include tax systems that offer incentives such as 0% corporate tax to overseas companies.

EU members have been left to decide what remedy to take against the offenders. Ministers ruled out imposing a withholding tax on annals to tax havens as well as other financial sanctions.

Some states, such as Luxembourg and Malta, contrasted stricter sanctions, according to officials. EU Commission Vice-President Valdis Dombrovskis revealed «stronger countermeasures would have been preferable».

Panama is one of the 17 woods listed by the EU but its president, Juan Carlos Varela, said the country was «not in any way a tax haven».

The EU is egg oning member states to take what it calls «defensive actions» against those hinterlands that do not reform their tax systems.

The UK-based charity Oxfam last week proclaimed its own list of 35 countries that it said should be blacklisted.

Oli Pearce, Oxfam’s difference and tax policy advisor, said: «It is disturbing to see mostly small countries on the EU blacklist, while the uncountable notorious tax havens — UK-linked places like Bermuda, the Cayman Holms, Jersey and the Virgin Islands — escape with a place on the ‘grey slant’.

«Although we recognise this is a step in the right direction, if EU leaders let too varied tax havens off the hook we’ll all lose out. A place on the grey list must not ungenerous tax havens get off scot-free.»

However, tax campaigner Richard Murphy said some mother countries on the grey list could still face heavy sanctions if they missed to reform their tax systems.

He said EU countries will be encouraged to disallow payments absconded to these places for tax purposes, or to charge withholding taxes on interest payments to them.

That engineering could «utterly neuter their so-called status as ‘tax neutral ecumenical financial centres’ by ensuring that all monies they receive suffer with been taxed before getting there», Mr Murphy said.

«The EU is also try to say to the UK that it is taking real measures against British Overseas Territories and Her Highness Dependencies, and the message is — if you go the same way as them with a similar low-tax administration after Brexit, you’ll be sanctioned too.»


The 17 blacklisted territories are:

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

The EU made exceptions for countries faced with not incongruous disasters such as hurricanes, and put the process temporarily on hold.


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