Cyprus Mail 22 January 2021 - by Andrew Rosenbaum
The European Parliament on Thursday voted a resolution to reform and expand the official list of global tax havens. The resolution calls for screening EU Member States for acting effectively as tax havens.
“EU countries are responsible for 36 per cent of tax havens,” one MEP said.
“The EU’s list of tax havens, set up in 2017, has had a positive impact so far but has failed to live up to its full potential, [with] jurisdictions currently on the list covering less than 2 per cent of worldwide tax revenue losses,” a statement published by the Parliament said. The resolution calls the current system “confusing and ineffective”.
The resolution proposes changes that would make the process of listing or delisting a country more transparent, consistent and impartial, the statement said. “Criteria should be added to ensure that more countries are considered a tax haven and to prevent countries from being removed from the blacklist too hastily.”
EU member states should also be screened to see if they display any characteristics of a tax haven, and those falling foul should be regarded as tax havens too, the resolution stated.
After the vote, the Chair of the Subcommittee on Tax Matters, Paul Tang (S&D, NL) said:
“By calling the EU list of tax havens “confusing and inefficient”, the Parliament tells it like it is. While the list can be a good tool, Member States forgot something when composing it: Actual tax havens. The truth is, the list is not getting better, it’s getting worse. Guernsey, the Bahamas and now the Cayman Islands are only some of the well-known tax havens that member states have taken off the list. In refusing to properly address tax avoidance, national governments are failing their citizens to the tune of over €140 billion. Especially in the current context, this is unacceptable.”
The criterion for judging if a country’s tax system is fair or not needs to be widened to include more practices and not only preferential tax rates, according to the statement.
“The fact that the Cayman Islands has just been removed from the black list, while running a 0% tax rate policy, is proof enough of this, MEPs say. Among other measures proposed, the resolution therefore says that all jurisdictions with a 0% corporate tax rate or with no taxes on companies’ profits should be automatically placed on the blacklist,” the statement says.
All third countries need to be treated and screened fairly using the same criteria, the statement says, stressing that the current list indicates that this is not the case. The lack of transparency with which it is drawn up and updated adds to these misgivings. They call for the process of establishing the list to be formalised through a legally binding instrument by the end of 2021 and question whether an informal body such as the Code of Conduct Group is able or suitable to update the blacklist.
