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EU governments whitewash tax havens of Mauritius and Switzerland
European Union finance ministers have removed Mauritius and Switzerland from the EU list of tax havens today.
Reacting to the news, Chiara Putaturo, Oxfam’s EU Policy Advisor on Tax and Inequalities, said:
“Tax havens cheat other countries out of vital tax revenues needed to put children in school and provide health services for citizens, and women in particular pay the price. Today, the EU has whitewashed two of the world’s most harmful tax havens. Despite recent reforms, both countries will continue to offer sweet treats to tax-dodging companies, like very low tax rates, accelerating the race to the bottom on corporate taxation”.
“Switzerland has abolished its preferential tax regimes, but it still offers large tax incentives and low rates to companies. This will likely continue to attract companies that are seeking to avoid paying their fair share of tax. Mauritius’ role as a tax haven has been exposed in the MauritiusLeaks, and the country won’t stop allowing corporations to shift billions in profits from other African countries.
“The EU must strengthen the criteria for its tax haven blacklist to make it an effective tool in the fight against tax dodging. It should also support the ongoing global reform discussions that can help end the era of tax havens, including an ambitious minimum effective tax rate.”.
- Oxfam spokespeople are available for interviews and background information.
- The EU tax have list is composed of a blacklist and a ‘grey list’. The blacklist includes countries that do not comply with at least one of the EU’s three criteria for tax havens. Zero-tax or near-zero tax regimes are not a binding criterion, but a ‘risk indicator’, according to the EU blacklist rules. The ‘grey list’ includes countries that do not comply with at least one of the tax haven criteria, but that have committed to reforms.
- Today, EU finance ministers delisted Mauritius and Switzerland together with three other countries – Albania, Costa Rica and Serbia – from their tax haven ‘grey list’. The Marshall Islands and the United Arab Emirates were delisted from the EU blacklist. The Marshall Islands now feature on the ‘grey list’.
- Oxfam’s report “Off the Hook” explains why the EU blacklisting process is not fit for purpose and helps to whitewash some of the world’s tax havens.
- ‘Off the Hook’ also found that five EU member states – Cyprus, Ireland, Luxembourg, Malta and the Netherlands – would be listed as tax havens if the EU criteria were applied to them. The European Parliament has called on the European Commission to formally recognize these five EU member states as tax havens.
- More than 130 governments are currently negotiating new global tax rules. This process is led by the OECD under the mandate of the G20 to ensure fair taxation of big corporations. This should include the introduction of a global minimum effective tax rate, which should be set at an ambitious level and applied at a country-by-country basis without exception. Such a minimum tax rate would put a stop to the damaging tax competition between countries and remove the incentive for profit shifting – effectively putting tax havens out of business. For more details, read Oxfam’s background briefing “Tax Revolution?” and see our latest comment on concrete proposals by the OECD.
- The two Commissioners-designate that will likely be in charge of taxation in the next European Commission, Margarete Vestager and Paolo Gentiloni, have both praised a minimum tax rate as a solution to tax dodging.
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