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Julia Irvine 1 Mar 2018 03:23pm

MEPs continue crackdown on tax avoidance

MEPs have taken EU finance ministers to task over their decision to remove eight countries from the tax haven blacklist just one month after it was first published

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MEPs have taken EU finance ministers to task over their decision to remove eight countries from the tax haven blacklist just one month after it was first published

They have warned that by removing jurisdictions from the list, the ministers are undermining the fight against tax evasion and avoidance.

The list of 17 “non-cooperative” countries, which was published in December, was intended to combat the use of offshore tax havens and prevent large scale tax abuse. But in January, the finance ministers moved eight countries – Barbados, Grenada, Macao, Mongolia, Panama, South Korea, Tunisia and the UAE – on to a “grey list” after receiving commitments from them to reform their tax policies.

“The Council’s decision…is inappropriate,” said German MEP Werner Langen. “The Council should not decide based on non-binding letters and assurances, but only on facts, which states should be removed from the list and finally consider which EU member states should be added to the list.”

Portuguese MEP Ana Gomes agreed. “I believe that the decision undermines the EU’s credibility, which was never very convincing in the first place, since some of the biggest tax havens in the world are EU member states, which constantly block any attempts for significant internal reform.”

During the blacklist debate yesterday, MEPs from all sides criticised the lack of transparency about both the compilation of the list and removing countries from it.

They also voted by 541 to 33 in support of a proposal which would require service providers who design or promote aggressive, cross-border tax schemes, to provide details of the schemes in a central directory directly accessible by member states’ tax authorities.

French MEP Emmanuel Maurel said that the European Parliament’s commitment to greater transparency and robust measures to tackle tax avoidance and evasion remained firm.

“When it comes to aggressive tax planning, public authorities must clean up the mess,” he added. “They cannot limit themselves to the flow of new schemes, they have to tackle the stock.”

MEPs also voted overwhelmingly today to set up a new committee to build on the work of TAXE 1 and 2 and the PANA inquiries. The 45-strong TAXE 3 has a 12-month mandate which starts immediately and it will investigate financial crime, tax evasion and avoidance especially in the light of the Paradise papers that were leaked last year.

The nine countries remaining on the blacklist include American Samoa, Bahrain, Guam, Marshall Islands, Namibia, Palau, Saint Lucia, Samoa and Trinidad and Tobago.

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