The EU has broadened its blacklist of tax havens in a revamp that triples the number of listed jurisdictions in a bid to limit tax evasion and avoidance
ADVERTISEMENTIn an effort to limit tax evasion and avoidance, European Union governments have adopted a broadened blacklist of tax havens, adding the United Arab Emirates and British and Dutch overseas territories in a revamp that tripled the number of listed jurisdictions.
The 28-nation EU set up the blacklist in December 2017 after revelations of widespread tax avoidance schemes used by corporations and wealthy individuals to lower their tax bills.
"Due to the dynamic nature of the process, listed jurisdictions have a concrete possibility to be delisted as soon as they have made significant progress based on their commitments," said Eugen Teodorovici, Romania's Finance Minister.
EU finance ministers added 10 jurisdictions to the updated list. They are: the Dutch Caribbean island of Aruba, Barbados, Belize, the British overseas territory of Bermuda, Fiji, the Marshall Islands, Oman, the United Arab Emirates, Vanuatu and Dominica.
They join Samoa, Trinidad and Tobago, and three U.S. territories of American Samoa, Guam, and the U.S. Virgin Islands, who were already on the blacklist.
Blacklisted states face reputational damages and stricter controls on transactions with the EU, although no sanctions have yet been agreed by EU states. The decision came despite opposition by some EU states to some listings.
"The blacklist is a tool. If it's strong, if it's monitored and if it's sanctioned, it can be a useful tool, but of course it's not enough. For instance we have this tool that is very important that is the country by country reporting. The publication of profit and tax that the corporations make in each country that hasn't passed the Council level, as it has been blocked because of (certain) countries' interests," said Tsiapa Pitatouro, a member of Oxfam specialising in tax affairs.
Jurisdictions are blacklisted if they have shortfalls in their tax rules that could favour tax evasion in other states. Those who commit to change the rules by a set deadline are removed from the list.