Blacklist of tax havens coming within six months, says EU
10 May 2016
A European-wide blacklist of non-cooperative tax jurisdictions is definitely coming and will be announced within six months, according to EU officials. Member of European Parliament (MEP) Jeppe Kofod, who is part of the TAXE2 Committee recently confirmed that an EU blacklist for non-cooperative tax jurisdictions is a priority for the European Commission.
“I am absolutely confident that the European Commission will have to deliver upon this, and that they will have to deliver soon,” Kofod said. “The European Parliament has called for such a list for a long time and Commissioner Moscovici has now committed himself to delivering within a six month time period.”
Taking aim at tax havens, some MEPs said they believe that a blacklist of uncooperative tax jurisdictions would not be enough to tackle the aggressive tax planning activities highlighted by the Panama Papers leak and have called for measures that go beyond ‘naming and shaming’.
“These leaks show there are still loopholes that need to be clamped down on,” said Stephen Quest, director-general of the Directorate-General for Taxation and Customs Union at the European Commission. Quest said during the TAXE2 Committee discussions that sanctions against blacklisted countries rarely progressed.
“The first sanction is the public disapproval of being listed, and that’s actually quite effective,” he said.
On the matter of sanctions, Kofod said, “At present, a wealth of different options is being debated, ranging from complete economic, political and diplomatic boycotts to special withholding-taxes on transfers to countries on the blacklist. However, a consensus on the exact sanctions and measures to be applied has yet to be found.”
In response to calls for tougher measures from Europe against jurisdictions considered tax havens, including the threat of sanctions, local industry experts said that any new European-Political motivation, however, in the current climate has clearly reached fever pitch, with the Panama Papers following similar leaks from Luxembourg and Switzerland, which MEPs said had focused public attention on the issue.
The TAXE2 Committee discussions take place as EU politicians examine the various measures introduced to crack down on aggressive tax planning and consider what more could be done to tackle the loss of tax revenue, estimated by the European Parliamentary Research Service to cost €50-70 billion each year.
Kofod said “Dialogue and transparency are key for progress,”
Since the Panama Papers leak, industry groups in the leading offshore centres have gone to great lengths to distance themselves and expound the benefits and major differences in their regulatory systems with Panama.
During the TAXE2 Committee meetings, MEPs also noted the existence of tax havens within the EU itself, and Kofod believes that the EU also needs to get its own house in order.
“Europe is no saint when it comes to tax evasion and imaginative tax schemes,” Kofod stated in the interview. “The ‘double Irish with a Dutch sandwich’-scheme is well known, as is the fact that we have seen some incredible lucrative mechanisms involving patent boxes in a number of EU member states. These issues have to be tackled as well.”