EU to ‘grey list’ Antigua and Barbuda

Antigua and Barbuda will be added to a European Union (E.U.) “grey list” of countries not in compliance with the E.U.’s tax avoidance standards.
The information surfaced in international media reports on Friday, and Prime Minister Gaston Browne indicated that his government is aware of the move.
According to the E.U., a grey listing indicates that the country does not respect E.U. anti-tax avoidance standards but has committed to change its practices. Antigua and Barbuda and the other countries hit by the September hurricanes were given a reprieve when the E.U. added 17 countries to the blacklist in December.
The twin island state registered on the E.U. radar because of its varied onshore and offshore financial services tax rates which the E.U. wants harmonised. The domestic corporation tax is currently at 25 percent while offshore banking tax ranges between one and 2.5 percent.
“Large OECD countries are now making the claim that profitable corporations are shifting their profits overseas to avoid paying taxes, and they’re now saying that countries that facilitate that type of shifting of business to provide these corporations with a tax shield, that they will be grey-listed or black- listed. Luckily for us, we’re only grey-listed,” Browne said.
“We have given a commitment that by the end of this year, 2018, we’ll harmonise the rates at 20 percent so the offshore banks, they will now have to pay 20 percent.”
The moves to be adopted next week by E.U. finance ministers will see a number of other Caribbean states added or removed from the bloc’s blacklist – those countries considered tax havens. Those that will be included are The Bahamas, the U.S. Virgin Islands, and St. Kitts and Nevis, while St. Lucia will be removed. Trinidad and Tobago, which was added in December, remains on the list.
The other countries that will be added to the grey list are Anguilla, The British Virgin Islands, and Dominica.
In announcing the reprieve for the hurricane-hit islands in December, the E.U. stated that those jurisdictions “will be asked to address the concerns identified as soon as the situation improves, with a view to resolving them by the end of 2018. By February 2018, they will be contacted to prepare the next steps.”
Blacklisting could lead to a loss of E.U. aid, damage to a country’s reputation, and stricter controls on its financial transactions with the E.U.