EU tax haven blacklist disputed by OECD and listed countries

OECD tax officials have expressed dissatisfaction with a blacklist of 30 tax havens prepared by the European Commission, as have several countries on the list.

The blacklist, published by the European Commission June 17, seeks to identify non-EU countries that have non-compliant tax practices, such as those that lack transparency, exchange of information, or fair tax competition. Countries are put on the EU blacklist if they have been named by at least 10 EU member states as being non-compliant.

EU tax commissioner Pierre Moscovici said that the initiative, part of the Commission’s Action Plan for Fair and Efficient Corporate Taxation in the EU, is designed to give EU states “collective weight” to put an end to external threats to their tax bases.

In a letter to Moscovici, though, OECD Secretary General Angel Gurría noted that many of the 30 jurisdictions identified on the blacklist are OECD Global Forum members that are rated as largely compliant and that have also committed to automatic exchange of information.

“There is nothing more that they could do in order to be considered as cooperative,” Gurría said in the letter, which was dated June 19 and which has since been removed from the OECD website.

Gurría said that the criteria decided upon by the Global Forum, comprised of 125 jurisdictions including the EU, should be used to evaluate cooperation in the area of exchange of information for tax purposes.

In a separate letter to Global Forum members placed on the OECD website on June 22, Pascal Saint-Amans, director of the OECD Centre for Tax Policy and Administration and Monica Bhatia, head of the Global Forum Secretariat, said that it is unfortunate that some have misinterpreted the EU list as being something more than a mere compilation of tax havens identified by individual EU states.

The officials note that it is unclear how individual EU states view compliance with Global Forum standards in determining whether to include a country on its blacklist. Moreover, it is impossible to determine which factors are considered since the factors can include the “absence of harmful tax measures” and “other criterion.”

“The OECD and the Global Forum . . .  would like to confirm that the only agreeable assessment of countries as regards their cooperation is made by the Global Forum and that a number of countries identified in the EU exercise are either fully or largely compliant and have committed to [automatic exchange of information], sometimes even as early adopters,” the officials said.

The Cayman Islands, Bermuda, Gurnsey, Lichtenstein, and Hong Kong have released separate statements expressing their disagreement with being included on the list.

The complete list of blacklisted countries is as follows: Andorra, Liechtenstein, Guernsey, Monaco, Mauritius, Liberia, Seychelles, Brunei, Hong Kong, Maldives, Cook Islands, Nauru, Niue, Marshall Islands, Vanuatu, Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Grenada, Montserrat, Panama, St Vincent and the Grenadines, St Kitts and Nevis, Turks and Caicos, US Virgin Islands.

See:

• EU Commission’s Announcement on Non-cooperative jurisdictions: Letter to Global Forum members