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First blacklist of tax havens published by the EU

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Saint Lucia is in the 17 "non-cooperative jurisdictions" of the EU

The European Union has published its first blacklist of tax havens, naming 17 territories including Saint Lucia, Barbados and South Korea.

An "observation list" of 47 countries that promise to change their tax rules to comply with EU standards has also been issued.

The "gray list" includes several with links from the United Kingdom, including Hong Kong, Jersey, Bermuda and the Cayman Islands, as well as Switzerland and Turkey.

Both lists have been criticized for omitting the most notorious tax havens.

The lists follow the filtering of the Panama Papers and the Paradise Documents, revealing how companies and individuals hid their wealth from tax authorities around the world in offshore accounts.

EU fiscal commissioner Pierre Moscovici said that the blacklist represented "substantial progress", adding: "Its very existence is an important step forward, but as it is the first EU list, it remains an insufficient response to the worldwide. "

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To determine whether a country is a "non-cooperative jurisdiction" the EU index measures the transparency of its tax regime, tax rates and whether the tax system encourages multinationals to change unfairly profits to low tax regimes to avoid higher tariffs in other states. In particular, these include tax systems that offer incentives such as 0% corporate taxes to foreign companies.

The members of the EU have been left to decide what action to take against the criminals. The ministers ruled out imposing a withholding tax on transactions to tax havens, as well as other financial sanctions.

Some states, such as Luxembourg and Malta, opposed more stringent sanctions, officials said. Vice-president of the EU Commission, Valdis Dombrovskis, said that "a stronger countermeasure would have been preferable".

Panama is one of the 17 countries listed by the EU but its president, Juan Carlos Varela, said that the country "was not a tax haven in any way".

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Panama is on the black list of tax havens in the EU

The EU is encouraging member states to take what they call "defensive actions" against those countries that do not reform their tax systems.

Oxfam, a charity based in the United Kingdom, published its own list of 35 countries last week that said they should be blacklisted.

Oli Pearce, advisor on tax and inequality policies at Oxfam, said: "It is disturbing to see small countries mostly the EU blacklist, while the most notorious tax havens – places linked to the United Kingdom such as Bermuda , Cayman Islands, Jersey and the Virgin Islands – escape with a place on the "gray list".

"Although we recognize that this is a step in the right direction, if the EU leaders let out many tax havens, we will all lose. A place on the gray list should not mean that tax havens go free. "

However, fiscal activist Richard Murphy said some countries on the gray list could still face heavy penalties if they did not reform their tax systems. [19659007] ] He said that EU countries would be encouraged to reject payments made to these places for tax purposes, or to withhold taxes on interest payments to them.

That tactic could "completely neutralize their supposed status as & # 39; fiscally neutral international financial & # 39; "The EU is also telling the United Kingdom that it is taking real action against the British Overseas Territories and the Crown Dependencies, and the message," said Murphy.

"The EU is also telling the United Kingdom that it is taking real action against the British Overseas Territories and the Crown Dependencies, that is, if you are going the same way as them with a similar tax regime after the Brexit, will also be sanctioned "

The 17 territories included in the blacklist are:

  • American Samoa
  • Bahrain
  • Barbados
  • Grenada [19659013] Guam
  • South Korea
  • Macao
  • The Marshall Islands
  • Mongolia
  • Namibia
  • Palau
  • Panama
  • Saint Lucia
  • Samoa
  • Trinidad and Tobago [19659013] Tunisia
  • United Arab Emirates

The EU made exceptions for countries facing natural disasters such as hurricanes and temporarily put the process on hold.

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