In the middle of the Pandora Papers scandal, the European Union decides to lose weight the list of tax havens. Thus, the EU finance ministers meeting in Luxembourg (Ecofin) have decided on Tuesday to remove Anguilla, Dominica and Seychelles from the EU list of non-cooperative countries and territories for tax purposes.
The EU pardons the Cayman Islands as a tax haven
All three had been included in the list “because they did not meet the EU’s tax transparency criteria” with regard to the exchange of information, says the EU Council. The delisting was preceded by the OECD decision to grant these jurisdictions a supplementary review on this matter.
Thus, nine jurisdictions remain on the EU list of tax havens: American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, US Virgin Islands and Vanuatu.
Pending the supplementary review, Anguilla, Dominica and Seychelles “are now included in the list of jurisdictions that still do not comply with all international tax standards but have committed to applying the principles of good tax governance,” say the ministers. Finance in its conclusions.
Costa Rica, Hong Kong, Malaysia, North Macedonia, Qatar and Uruguay have also been added to this list, while Australia, Eswantini and Maldives “have implemented all the necessary tax reforms” and have been eliminated.
Following Tuesday’s review, Turkey continues to be mentioned as a country under observation. In its February 2021 conclusions, the EU Council urged Turkey to commit to automatic information exchange with all member states. “Although progress has been made since then, more action is needed,” says Ecofin
“The EU blacklist should penalize true tax havens,” says Íñigo Macías, Oxfam Intermón research coordinator: “However, it sets them free. The decision removes from this list Anguilla, the only jurisdiction left with a 0% tax rate on corporate profits, and the Seychelles, a jurisdiction implicated in the latest of the Pandora Papers tax leaks. With these latest changes, the EU blacklist becomes irrelevant and ineffective, difficult to take seriously. While the Pandora Papers investigation reveals how the super-rich continue to use tax havens to avoid paying their taxes, the effort to face the fiscal cost that recovery from COVID-19 entails continues to be passed on to all families. “.
Macías maintains that “the EU is turning a blind eye to the operation of true tax havens, the most aggressive territories. But at the same time, it is considering blacklisting those developing countries that do not adhere to the imminent global tax deal promoted by the G20 and the OECD. This agreement, far from being historic, is unfair in its design because it benefits rich countries and ignores the interests of poorer countries. The EU should review the criteria to determine which countries and jurisdictions are included in this list and operate as true tax havens rather than the black list being an excuse to pressure countries to sign the OECD-G20 agreement. ”
According recent OECD statistics on the report On a country-by-country basis, Oxfam Intermón estimates that in 2017, Spanish subsidiaries recorded in Barbados (with a corporate profit rate of 5.5%), a level of profit before tax per employee of $ 24.2 million, plus 2,400 times that observed in Colombia, a country whose population is 170 times that of Barbados. In fact, the EU removed Barbados from its list in early 2021.
“If these reforms are not carried out, the European blacklist will continue to be a laundering tool that allows the richest and most profitable companies to continue escaping without paying their fair share of taxes,” the entity maintains.
En Comú Podem MEP and Greens / ALE Vice President Ernest Urtasun commented: “Today’s update of the list is deeply disappointing. With the exception of Panama, none of the large international financial centers that facilitate fraud and tax evasion are on the list. It cannot be that some decisions are made based on technical criteria and others only on political criteria. Turkey receives preferential treatment, the US remains excluded despite failing to comply with the information exchange criteria. Since its inception in 2017, this list has had a positive impact in some areas, but it is time to go further. The transparency of beneficial ownership of companies is still not a criterion for being on the list. If it were, the Virgin Islands would be on the list. ”