EU tax haven blacklist updated

Panama, the Seychelles, the Cayman Islands and Palau were added, Turkey was given one more year

European Union finance ministers added last Tuesday Panama, the Seychelles, the Cayman Islands and Palau to the EU's blacklist of tax havens, and gave Turkey more time to avoid being listed, news wires reported. The list, which was set up in 2017 after revelations of widespread tax evasion and avoidance schemes, now includes 12 jurisdictions.

Adding financial centres like the Cayman Islands and Panama marks significant policy shift. So far the EU blacklist has included mostly Pacific and Caribbean islands with almost no financial relation with the EU. The other listed jurisdictions are Fiji, Oman, Samoa, Trinidad and Tobago, Vanuatu and the three US territories of American Samoa, Guam, and the US Virgin Islands.

“The EU list of non-cooperative tax jurisdictions is helping to deliver real improvements in global tax transparency. To date, we have examined 95 countries' tax systems and the majority of these now comply with our good governance standards. This process has led to the elimination of over 120 harmful tax regimes worldwide, and dozens of countries have started to apply tax transparency standards. Our citizens expect the wealthiest individuals and corporations to pay their fair share in tax and any jurisdiction that enables them to avoid doing that must face the consequences,” Economy Commissioner Paolo Gentiloni said.

The Cayman Islands, a British overseas territory in the Caribbean, was listed because investment funds based there do not reflect real economic activity on the archipelago, the document said. That could lead to investment vehicles being created solely to reduce taxes in other jurisdictions. The eastern African archipelago of the Seychelles was added to the blacklist because it has an “harmful preferential tax regime”.

Turkey failed to execute automatic transfers of tax information with all EU states but was granted more time to fulfil its commitments, because it has adopted legislative changes to allow data sharing. The decision irked Cyprus, an EU member state embroiled in a decades-long dispute with Ankara and with which Turkey is not exchanging tax data. Turkey also does not share tax data with Germany, France, the Netherlands, Belgium and Austria, the EU countries with the largest Turkish communities, diplomats said. Despite these shortcomings, which had been unresolved for years when a deadline lapsed in December, Ankara was given another year to begin data sharing with all 27 EU states.

Similar articles