EU tax havens list: Antigua and Barbuda blacklisted for non-cooperation

front 1 eu blacklist
Tax havens allow non-residents to escape high taxes by putting their assets or businesses in that jurisdiction (Image courtesy Investopedia)
- Advertisement -

By Robert A Emmanuel

[email protected]

Antigua and Barbuda has been added to the European Union’s list of non-cooperative tax jurisdictions.

In a press release issued yesterday, the Council of the EU stated that the twin island nation, plus Belize and the Seychelles were found to be lacking with regard to the exchange of tax information on request — its criterion 1.2.

“This EU list of non-cooperative tax jurisdictions (annex 1) includes countries that either have not engaged in a constructive dialogue with the EU on tax governance or have failed to deliver on their commitments to implement the necessary reforms,” the statement reads.

Additionally, the EU Council announced the removal of the British Virgin Islands, Costa Rica and the Marshall Islands from the list.

This leaves just 16 jurisdictions on the EU non-compliance list, also including American Samoa, Anguilla, the Bahamas, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, Turks and Caicos, the US Virgin Islands, and Vanuatu.

According to EU rules, jurisdictions should be able to exchange tax information on request and, to assess this, the Code of Conduct Group assesses peer-reviewed reports issued by the Global Forum which evaluates the extent jurisdictions comply with the Organisation for Economic Co-operation and Development’s standard.

This standard looks at two phases—examining the legal and regulatory framework and looking into the implementation of the framework in practice.

“If a report concludes that a jurisdiction is overall ‘not compliant’ or ‘partially compliant’ with the standard, that jurisdiction is then proposed to be included on the EU list of non-cooperative jurisdictions for tax purposes,” the EU rules explained.

According to the report, Antigua and Barbuda does not have a rating of at least ‘largely compliant’ by the Global Forum for exchange of information on request.

The EU list of non-cooperative jurisdictions for tax purposes was established in December 2017 and is part of the EU’s external strategy on taxation and aimed to contribute to ongoing efforts to promote tax good governance worldwide.

However, an EU tax expert for Oxfam International, Chiara Putaturo, called the list a “nonsense exercise”.

“The list is toothless. It leaves off the hook zero-tax countries like the British Virgin Islands and fails to screen countries like the US and the UK along with EU tax havens like Luxembourg and Malta.

“It’s an insult to ordinary people struggling with soaring bills while the super-rich and profit-hungry multinationals get a free pass to escape their tax obligations,” she said.

“The EU must deliver on its long-standing promise to reform the list if they are serious about fighting tax havens. Countries deemed too big to be listed can no longer escape scrutiny.

“Countries allowing companies to pay essentially a zero-tax bill or to hide their real owners must face blacklisting. The EU also cannot afford to turn a blind eye to tax havens within its own borders,” Putaturo added.

The EU tax blacklist was adopted in 2017, when the EU Council placed the screening process on hold for Antigua and Barbuda, Anguilla, the Bahamas, the British Virgin Islands, Dominica, St Kitts and Nevis, the Turks and Caicos Islands, and the US Virgin Islands due to Hurricane Irma that year.

Beyond the mere stigma of being added to the EU blacklist, European countries could apply both tax and non-tax “defensive measures” in response to help to protect their tax revenues and fight against tax fraud, evasion and abuse, including denial of EU financing from the European Fund for Sustainable Development.

The next revision of the list will be in February 2024.

What is a tax haven?

  • A tax haven is a country that offers foreign businesses and individuals minimal or no tax liability for their bank deposits in a politically and economically stable environment. They have tax advantages for corporations and for the very wealthy, and obvious potential for misuse in illegal tax avoidance schemes.
  • Companies and wealthy individuals may use tax havens legally as a means of stashing money earned abroad while avoiding higher taxes in the US and other nations.
  • Tax havens may also be used illegally to hide money from tax authorities at home. The tax haven can make this work by being uncooperative with foreign tax authorities. In recent times, tax havens are under increasing international political pressure to cooperate with foreign tax fraud inquiries.

(Source: Investopedia)

- Advertisement -