The EU Blacklist of Tax Havens

Over the past few weeks the European Union has published a list of 30 countries which have been listed as non-cooperative jurisdictions. This publication was part of a wider publication: the “Action Plan for Fair and Efficient Corporate Taxation in the EU” which also includes the Re-Launching of the CCCTB.

This list includes territories like Monaco, British Virgin Islands and Hong Kong.    The European Commissioner for Economic and Financial Affairs, Taxation and Customs, has claimed that this was to “push non-cooperative non-EU jurisdictions to be more cooperative and adopt international standards."  In fact the publication of this list is the first step under the Action Plan’s fourth item intended to deal with issues of tax transparency.

However, this publication was immediately criticised heavily by the OECD through its Director for Centre for Tax Policy. The reason for such criticism is that some of the listed jurisdictions had made substantial efforts to co-operate with the OECD and the Global Forum on Transparency and Exchange of Information for Tax Purposes.  Some of the listed jurisdictions are also largely or fully compliant with the provisions for the Automatic Exchange of Information (“AEOI”), some like Liechtenstein also being early adopters of the provisions.  The OECD felt that this publication could harm the progress that had been achieved and felt it necessary to take its stand on the publication, and therefore had to take a stand on the issue and has expressed its concerns with the Commission.

This crack-down on non-compliant jurisdictions, can create a bigger interest in alternative jurisdictions such as Malta, which even though it can be seen as low tax jurisdiction (due to its low effective rate of tax on corporate profits distributed to the shareholders), it is largely co-operative and transparent, as well as being a member of the EU.