EU countries ‘fail fair tax tests’

29 Nov 17

A number of European Union member states would be blacklisted as tax havens according to the bloc’s own rules, NGOs have said.  

The EU is set to publish its blacklist next week, but member states are excluded from the analysis, which will judge 92 non-EU countries and jurisdictions against criteria including tax transparency, fair taxation and profit shifting policies.

But Oxfam has applied the EU’s criteria to the 28 current EU member states, as well as the 92 non-members. It found that Ireland, Luxembourg, the Netherlands and Malta all met the criteria for being listed as a tax haven along with 35 non-EU countries.

A separate report from the Tax Justice Network revealed that Cyprus and the UK also met the criteria. Following Brexit the UK could find itself on the list as it acts as a “tax conduit”, according to the report, with low taxes on capital movement, which allows multinationals to shift profits to low-tax jurisdictions.

At a UK All Parliamentary Group seminar on the Brexit impacts on tax last week, experts also warned the UK was at risk of being on the blacklist.

Oxfam’s Ireland chief executive Jim Clarken said: “If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

He added that the OECD’s blacklisting process has been called into question because it only listed one country, Trinidad and Tobago, as a tax haven.

Oxfam called on the EU to put rules in place to reform the tax system of member states, especially those that meet the bloc’s blacklisting criteria.

Earlier this month, the NGO called on the UK government to take action to increase transparency and tackle tax dodging, following the Paradise Paper leak.

Clarken said: “As Ireland fails the EU’s blacklisting criteria, it is clear that the government has questions to answer with regard to its stated commitment to tackling tax avoidance.

“In the past, the case has been made that because Ireland’s tax arrangements fulfilled OECD standards there was no substantiation that Ireland matched the conditions with tax haven status.”

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