EU finance ministers on Tuesday agreed on the criteria to draw up a European blacklist of tax havens, but Britain watered down the proposal, eager to protect low tax dependencies such as Bermuda and Guernsey.
Europeans have struggled to agree on the basis of an EU-wide tax haven blacklist, even after revelations in the Panama Papers and Luxembourg’s LuxLeaks so-called ‘scandals’ shocked the general public on the strategies used by the rich people and big companies to reduce tax bills.
The European Commission, the EU’s executive arm, has taken the lead on cracking down on tax havens and wants to draw up a list of problem jurisdictions by the end of next year.
Britain, as well as Malta and the Baltic states, however blocked a push to include zero or near-zero corporate tax rates as one of the criteria to land on the EU’s blacklist, diplomats said.
The ministers agreed to delay that decision for now — presumably at least until after Britain leaves the EU after its Brexit divorce, expected in 2019. But it ordered a task force to explore the idea further.
“What was very important for some countries was the near zero corporate tax rate, which is important for us too, but maybe as an indicator not as an actual criteria,” said Spanish Economy Minister Luis De Guindos after the talks.
The 28 ministers agreed other criteria however including a demand that third countries automatically exchange tax information and agree to an already existing set of G20 standards to fight tax evasion.