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EU issues tax haven blacklist

Sun sea and tax avoidance might sound like paradise but the European Union doesn't agree. It's issued a blacklist of 17 countries it says are tax havens.

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EU issues tax haven blacklist

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Sun sea and tax avoidance might sound like paradise but the European Union doesn’t agree. It’s issued a blacklist of 17 countries it says are tax havens.

For now, blacklisted countries could lose access to EU funds but further measures are still to be decided.

“This is a victory that should be followed by others,” says EU Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici. “I urge member states not to be naive about the commitments to make sure they are strong and to put in place dissuasive sanctions, because we must maintain pressure on third countries”.

Alongside the blacklist, a grey list of 47 other countries. They aren’t currently compliant with EU tax standards but have committed to reform. Critics say that’s a white wash – giving major offenders too much leeway, while emerging economies are sanctioned.

“That could be encouraging,” says Oxfam tax specialist Aurore Chardonnet, “but the big question for us is how the EU member states are going to ensure those countries are going to reform how are they going to follow up that’s the big remaining question”

Developed countries on the grey list have one year to meet EU criteria; developing countries will have two years to adapt their legislation.

On the grey list, Albania. The Eastern European country intends to join the EU but hasn’t yet committed to new minimum standards to reduce corporate tax dodging.

Jurisdictions of the so called developed countries will have one year until 2018 to adapt their legislation to the european criterias (tax transparency, fair tax taxation and compliance with international forums on corporate tax avoidance) while developing countries have two years time until 2019. Among those who have committed to make reforms there is Albania, that intends to join the EU but so far it has not committed to implement any of the newly agreed international minimum standards to reduce corporate tax avoidance, at least not publicly. He was in Brussels to meet Mogherini, Juncker, Tajani and Tusk

“We have made great progress in this direction,” says Albanian Prime Minister Eda Rana. “It is very easy to blame others and it is even easier to blame small countries that are facing with courage and determination the challenges to build a better future because the past has been so ungenerous to them”.

Countries on the blacklist include Panama, Bahrain and South Korea.