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December 06 , 2017

EU blacklists 17 ‘non-cooperative’ tax havens

LAHORE: In what could be dubbed an eyebrow-raising international development, especially for the rich and affluent people across the planet, the European Union has black listed 17 extra-EU tax havens, influential news agency "Reuters: reported on Tuesday.
Carrying a "Reuters" story, "France24," a Paris-based international news and current affairs television network, stated: "European Union finance ministers adopted on Tuesday a blacklist of tax havens which includes 17 extra-EU jurisdictions seen as not cooperative on tax matters, French Finance Minister Bruno Le Maire said. American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and United Arab Emirates are the countries listed, officials said."
Owned wholly by the French government since 2008, France24 with an approximately €100 million per year budget added: "Le Maire said that another 47 jurisdictions are included in a public "grey" list of countries that are currently not compliant with the EU standards but have committed to change their tax rules. Following multiple disclosures of offshore tax avoidance schemes by companies and wealthy individuals, EU states launched a process in February to list tax havens to discourage setting up shell structures abroad which are themselves in many cases legal but could hide illicit activities. Blacklisted countries could lose access to EU funds. Other possible countermeasures will be decided in coming weeks, Le Maire said."
Meanwhile, while carrying the same "Reuters" story verbatim, the "New York Times" has added a bit more to send shivers down the diaphragms of people holding accounts in the above-mentioned tax havens. The prestigious American newspaper asserts: "Morocco and Cape Verde were moved from the blacklist to the watch list at a late hour after making last-minute commitments to tax reforms, officials said. The lists will be updated regularly. Blacklisted countries may no longer be used by EU institutions for international financial operations, and transactions involving them could be subject to closer scrutiny. These penalties may have little effect in persuading the wealthiest tax havens to change course, however."Stronger countermeasures would have been preferable," EU Commission Vice-President Valdis Dombrovskis told a news conference after the meeting. Some states, like Luxembourg and Malta, opposed stricter sanctions, officials said."
The "New York Times" has held: "The ministers ruled out imposing a withholding tax on transactions to tax havens as well as other financial sanctions. Britain had shown reticence over the process, EU officials said. No British overseas territories such as the Cayman Islands or Bermuda, nor the Channel Islands were put on the blacklist, in what was seen as a diplomatic victory for London. They were put on the grey list instead. Bermuda was at the centre of the most recent large disclosure of offshore financial documents, the Paradise Papers. Eight Caribbean islands recently hit by hurricanes, including Anguilla and the Bahamas, were given until March to comply with EU standards before a decision is made on their listing. EU states have not been screened and will not be on the list. The commission said none of the 28 members of the bloc can be classified as a tax haven, as all have agreed to respect EU tax standards."
It added: "But anti-poverty and fair tax groups said that if screened against EU criteria, countries like Luxembourg, Malta, the Netherlands and Ireland would all be on the EU list. "The list cannot just comprise third countries but must also contain EU jurisdictions," the German conservative vice-chair of the European Parliament's economic affairs committee, Markus Ferber, said in a statement on Tuesday. EU ministers also adopted a common position on taxation of tech corporations like Amazon or Facebook, which have been accused of paying too little tax in the EU. Such firms reroute the booking of their profits to low-tax nations where they have headquarters, like Luxembourg and Ireland."
The influential American media outlet also disclosed: "The ministers also agreed on new rules forcing online shopping firms such as Amazon, Google and Alibaba to collect the value-added tax (VAT) on sales on their platforms, to counter possible tax fraud by firms using such platforms."
The "ABC News," the news division of the American Broadcasting Company, maintained: "The European Union on Tuesday put 17 non-EU countries on a blacklist of those it deems guilty of unfairly offering tax avoidance schemes. 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."Tax havens will not disappear from our radars and we will keep the pressure on," he said."
Owned by the Disney Media Networks division of The Walt Disney Company, this media house has reported: "The EU said those blacklisted had refused to cooperate and change their way after almost one year of consultations."
Founded 72 years ago, this is what the "ABC News" has further aired on this development that might have massive repercussions in weeks and months to come: "The EU's penalties on the blacklisted countries still need to be confirmed. In the meantime, the threat of being blacklisted and sanctioned has spurred many countries to cooperate with the EU, a sign that public shaming alone will have an impact, said EU legislator Tom Vandenkendelaere of the EPP Christian Democrats. "It already had a positive impact. To avoid getting on the list, a great many nations have already shown to be cooperative," Vandenkendelaere said. "In the future, too, most countries will try to avoid being publicly shamed."
It said: "The issue of tax havens resurfaced this year when media reports based on leaked documents, dubbed the Paradise Papers, showed how the rich and famous stash their wealth in shell companies in small nations to avoid paying taxes at home. Higher-tax countries like France have pushed for the blacklist as well as a crackdown on tax havens in the EU as well. Lower-tax countries like Ireland and the Netherlands argue that will hurt Europe's competitiveness."

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