Eight countries are removed from the EU Tax Haven Blacklist
The EU introduced a tax haven blacklist late in 2017 after concerns that not enough was being done by some counties to reduce perceived tax dodging.
The list was put in place by the European Council’s Code of Conduct (COC) and inclusion is based on whether a country is seen to be giving preferential treatment to companies, so as to enable them to move profits to avoid charges.
To be removed from the list, a country needs to demonstrate that it has taken sufficient measures to reduce the problem, and therefore “remedy” the EU’s concerns about their approaches to tax dodging.
Panama, Barbados and Grenada were among states that came off the list, which now includes only nine nations. Three countries, in addition to South Korea, Macau, Mongolia, Tunisia and the UAE, were moved on to a “greylist” which comprises of countries the EU has concerns about, but believes they are progressing in improving their approach to the problem.
Fair tax campaigners were concerned when the list was introduced in 2017 because of “its narrow scope and omission of a number of notorious tax havens”, including some British overseas territories such as such as the Cayman Island and Bermuda that were on a previous EU blacklist from June 2015.
This recent decision has therefore been controversial, with campaigners accusing the EU of ‘going soft’ on tax evasion. Countries on the greylist may be transferred back to the blacklist however, if they fail to improve promptly as required.
Oxfam’s EU policy adviser on tax and inequality, Aurore Chardonnet said “The EU is rushing to take countries off the blacklist without it being clear what they have actually committed to improve; this is further undermining the process,”
“It is no secret that tax havens remain at the heart of the EU, with four European countries actually failing the EU’s own blacklisting criteria.
Markus Ferber, center-right MEP and vice-chair of the European Parliament’s economic committee, said: “Today’s decision is a confession of failure. Crossing Panama, one of the world’s most prolific tax havens off the blacklist, is a disastrous sign in the fight against tax avoidance.”
However, the minister for finance of Estonia, which currently holds the European Council presidency, Toomas Tõniste was quick to comment that “This initiative is already proving its value, as numerous countries have worked to meet the deadline for making commitments on the basis of our criteria”.