Reuters has reported:
The European Union’s tax commissioner on Tuesday called on the bloc’s governments to be ambitious when they decide on a common blacklist of tax havens next week and said European funding to countries on the list should be frozen.
As noted here recently, the EU tax haven black list is due to be announced next week. The Tax Justice Network thinks 41 states should be listed, and an additional six EU member states, which are Cyprus, Ireland, Luxembourg, Malta, Netherlands and the United Kingdom. None of those places will surprise anyone and the EU has appeared to be thorough, having screened 92 jurisdictions worldwide against the threefold criteria of tax transparency, use of harmful tax practices and cooperation on fiscal matters.
But it looks as if the EU is going to fail the real test. It seems certain that no EU country will end up on the blacklist. And those places who are not compliant but have committed to change their tax rules are likely to be included in a separate, “grey list”, as several EU officials call it, which might not be made public. According to Reuters:
A Commission spokeswoman said on Tuesday that all EU states “fully comply” with the criteria set to establish the tax havens’ blacklist.
Some EU states still applied “harmful tax practices which lead to aggressive tax planning”, and cited cases in Britain, Malta and the Netherlands.
That, however, does not look to be enough to ensure blacklisting. And that means this list has no credibility from the outset.
When will we learn that beating abuse requires naming and shaming those undertaking it? That, thankfully, is happening elsewhere now. Why not in tax? It's overdue and the EU will make a fool of itself if it does not deliver.
Alex Cobham has written a damning piece on this for the EU Observer, here.