Tax

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The European Union has blacklisted 17 countries as tax havens as it cracks down on tax avoidance, and put another 47 on a list to make reforms to avoid being labelled tax havens.

American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, St Lucia, Samoa, Trinidad & Tobago, Tunisia and United Arab Emirates were named as “non-compliant jurisdictions” in the first EU blacklist of tax havens.

Six Pacific region countries were on the grey list — Fiji, Cook Islands, Nauru, Niue, Vanuatu, and New Caledonia.

The EU said the countries weren’t meeting international standards and hadn’t made sufficient commitments to change their ways.

The EU failed to agree to any sanctions on the black listed countries.

A second “grey” list of 47 nations that have committed to meeting EU tax rules by the end of 2018 includes Cook Islands, Fiji and Vanuatu.

As developing nations, Fiji and Vanuatu have an extra year after that to meet standards before they are placed on the black list.

EU Council head Toomas Tõniste said the lists will be regularly reviewed until “good tax governance becomes the new norm”.

The blacklisting means the countries may not be eligible for certain types of financial help from the EU, but the 27 member group is split on whether it should impose formal sanctions on offending countries.

Pierre Moscovici, European commissioner for tax, called the list an important step but an “insufficient response to the scale of tax evasion worldwide”.

“Blacklisted jurisdictions must face consequences in the form of dissuasive sanctions, while those that have made commitments must follow up on them quickly and credibly,” he said in a statement.

The grey-list of countries promising to reform to meet the European Union’s criteria included well known developed economies — Switzerland, Liechtenstein, and Hong Kong.

They also included a host of British related territories, Jersey, the Isle of Man, Bermuda and the Cayman Islands, which featured prominently in the recent Paradise Papers data leak on how companies and wealthy individuals used tax havens to minimise or evade tax.

The EU action did not impress some groups campaigning for greater transparency and tax reform.

The European Network of Debt and Development said the list looked like an attempt to divert attention away from the fact that EU governments had failed to clean up their own house.

“The EU itself is central to the tax haven problem, and many European countries have tax structures that multinationals can use to avoid taxes — that’s deeply concerning,” said the group’s tax co-ordinator, Tove Maria Ryding, in a statement.

-Radio New Zealand

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