EU blacklist must penalise tax havens, not punish poor countries

Published: 5th October 2021


Today, Tuesday 5 October, European economic and finance ministers met to approve an update to the EU’s list of tax havens. This comes in the midst of the unfolding Pandora papers scandal and global tax negotiations. 

In response, Chiara Putaturo, Oxfam’s EU Tax expert, said:

“The EU blacklist should penalise tax havens. Instead, it lets them off the hook. Today’s decision to delist Anguilla, the only remaining jurisdiction with a zero per cent tax rate, and the Seychelles, which are at the heart of the latest tax scandal, renders the EU’s blacklist a joke. While the Pandora Papers investigation blew the lid on how the super-rich continue to use tax havens to avoid paying their taxes, ordinary people are asked to foot the Covid-19 recovery bill.

“The EU is shutting its eyes to real tax havens while considering blacklisting poor countries who do not sign up to the imminent global tax agreement. This deal is unfair as it benefits rich countries and ignores the needs of poor countries. Instead of using the blacklist as a tool to force poor countries into accepting an unfair tax deal, the EU should reform the list’s criteria to target real tax havens.

“In the next months, European governments have the opportunity to reform the EU’s blacklist. They must blacklist zero per cent and very low tax jurisdictions, set up indicators to detect where companies have fake economic activity and require transparency of their real owner. The reform must make the blacklist fit for purpose. Otherwise, the list will remain a whitewashing tool which allows the wealthiest and the most profitable companies to continue escaping their fair share of taxes.” 
 

Notes to editors

  • Today, European governments published a revised list of blacklisted countries. The list removed Anguilla, Dominica and Seychelles from the blacklist.
     
  • EU countries and the European Commission are currently revising the criteria of the EU blacklist. This should be finalised in early 2022.
     
  • In a new media briefing, Oxfam explains why the current list does not capture real tax havens, why it is unfair and what should be changed.
     
  • An agreement on global tax reforms (BEPS2) negotiated by OECD Inclusive Framework countries is likely to be endorsed by G20 leaders at the end of October. This package contains two pillars. Pillar 1 introduces the right to tax big multinationals based on where they make their sales. Pillar 2 establishes a global minimum corporate tax rate of 15%. Countries must endorse both pillars as one package. In the next days, Oxfam will publish a new analysis with evidence of the unfairness of the OECD proposal.
     
  • In the Communication on Business Taxation for the 21st century, the European Commission announced plans to introduce future criteria requiring the endorsement of the global tax reforms.
     
  • On Sunday, the International Consortium of Investigative Journalists (ICIJ) published the Pandora Papers investigation which showed how wealthy individuals use tax havens to hide their fortune or to escape taxes. Almost none of the countries identified as secret jurisdictions features in the EU blacklist. Seychelles was one of the most mentioned jurisdictions and was delisted from the EU’s blacklist today. Introducing a criterion of the list to make sure that the person who owns or controls the company (beneficial owner) is disclosed can increase transparency and help capture some of these jurisdictions. European governments have been considering introducing this type of measure for many years. They are now waiting for the overall reform of the criteria to introduce this measure.
     

Contact information

Jade Tenwick | Brussels, Belgium | +32 473 56 22 60 | e-mail: jade.tenwick@oxfam.org  

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