Picture: ISTOCK
Picture: ISTOCK

Brussels — EU finance ministers would discuss setting up a blacklist of worldwide tax havens on Tuesday, EU officials said, after leaked documents from an offshore law firm revealed investments by wealthy individuals and institutions globally.

The subject’s inclusion on the monthly meeting’s agenda came after the weekend publication of media reports citing the so-called Paradise Papers, a trove of leaked financial documents mostly from Appleby, a prominent offshore law firm.

EU countries had planned for months to reach an agreement on a blacklist for tax havens by the end of 2017. The new revelations prompted the discussion to be brought forward, EU officials said.

No final decision was expected on Tuesday.

The EU has discussed measures to crack down on tax avoidance in the past, including in the wake of the 2016 Panama Paperschronicling a shadowy world of offshore holdings and hidden wealth.

Measures previously discussed include an EU-wide list of tax havens meant to discourage the rerouting of profits made in the EU to tax-free or low-tax countries, such as Panama.

At the moment, each EU country has its own list of jurisdictions that are seen as less co-operative on tax matters. Criteria to define a tax haven vary greatly among EU states and some include no jurisdictions in their national blacklists.

An EU blacklist is believed to carry more weight.

Jurisdictions included in the list could be subject to sanctions if they did not co-operate. There are no details yet of the type of sanctions to be discussed, although being on the blacklist could discourage individuals and companies from putting money in those jurisdictions.

Some EU countries remain sceptical about the blacklist and are themselves under scrutiny for unfair tax competition. EU states such as Luxembourg, Malta and Ireland attract firms with lower corporate taxes. Some have been sanctioned for deals with multinationals that slashed their tax bills, reducing revenues in other EU states.

To win over their resistance, the proposed EU blacklist would apply only to non-EU countries.

Reuters

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