Published: Thu, December 07, 2017
Worldwide | By Gretchen Simon

European Union agrees on new tax haven blacklist of 17 countries

European Union agrees on new tax haven blacklist of 17 countries

On the list going into the talks were also Barbados, Cape Verde, Grenada, Macao, Marshall Islands, Palau, Saint Lucia, Tunisia and the United Arab Emirates, according to a draft seen by AFP.

The news comes as the European Union moves to clamp down on tax avoidance by non-compliant countries and discourage the use of shell structures overseas.

A second public "grey list" or "watchlist", of 47 jurisdictions that have committed to changing their tax rules to abide by European Union standards on transparency and cooperation was also adopted.

The Code of Conduct Group on Business Taxation should, by February 2018, pursue further contacts with these jurisdictions, with the view to resolving concerns by the end of 2018, the Council said.

The EU proposed new rules past year that would force multinational companies that operate in the bloc to reveal details about their operations in tax havens and summarize how much tax they pay in countries around the world.

The EU said that the listed countries and regions could potentially face sanctions for failing to bring their standards in line with the bloc, at a time when the bloc is seeking to step up its fight against opaque practices that facilitate tax avoidance by multinationals and individuals.

EU Vice President Valdis Dombrovskis said after a meeting of the bloc's finance ministers that beyond the 17 nations, over 40 more were put on a "grey list" to be monitored until they are fully committed to reforms.

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"We will regularly review and update the list in the years to come". Other states are unwilling to draw up common measures in belief that responsibility is better left to member states.

These include increased monitoring of certain transactions and auditing, special documentation requirements and mandatory disclosure disclosure of tax schemes with respect to cross-border arrangements. Some large companies - including Apple, General Electric, and others - often stash billions of dollars overseas in tax havens, like Luxembourg and the Cayman Islands, so they can effectively defer payment of their taxes.

In compiling its own version of the blacklist, Oxfam assessed countries against the EU's three criteria: transparency, fair taxation and participation in worldwide fora on tax.

Trinidad and Tobago was identified as one of 19 secrecy jurisdictions in the Paradise Papers.

Interestingly, this is the sole criterion the UAE failed, which has landed it on the EU's blacklist.

"We want this list to be complete and effective".

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