European Commission Intensifies Work on Blacklist of Tax Havens

The European Commission continued to intensively address the hot topic of tax fraud and evasion last week, this time working on a list of ‘non-cooperative tax jurisdictions’ or simply the blacklist of tax havens. The European push against tax misconduct continues, although the final list of ‘winners’ will be published at the end of next year, after a detailed analysis and consultations with the countries that stand out. The Commission has, in fact, presented a pre-assessment of all third countries based on key indicators, after which member states will decide which of these countries will be shortlisted for the final award, inclusion on the list.

How to Identify Them

The aim is to prevent aggressive exploitation of discrepancies between different tax systems with a unique list at the level of the entire European Union, but the list will be considered only as a last resort aimed at those countries ‘that refuse to respect the principles of good governance in taxation when all other options for cooperation with those countries have been exhausted.’ All ‘third countries’ (non-EU members) and all tax jurisdictions are in competition to filter regimes that can be characterized as tax problematic in a later phase.

– This pre-assessment was based on a wide range of neutral and objective indicators, including economic data, financial activity, institutional and legal structures, and basic standards of good governance in taxation, states the Commission’s announcement.

Possibility of Defense

The overall process is conducted in three steps, with the status review being the first. This will be followed by an analytical review of selected countries that stand out for various reasons in the initial analysis, and the ‘named’ countries will have the opportunity to respond to questions that concern the EU. The final step is, of course, the inclusion on the list of countries that have refused to cooperate with the EU.

– In the European Union, we take our international obligations regarding good governance in taxation seriously. It goes without saying that we expect the same from other countries. With our partners, we want fair and open discussions on tax issues because these issues concern all of us who are part of the global community. The EU’s list will be our tool for relations with third countries that refuse to play fair, commented Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici.