REACTION: The EU lets tax havens off the hook again

Reacting to today’s review of the European Union’s tax haven list, Katy Chakrabortty, Oxfam Head of Advocacy said:

“While it is encouraging that the Cayman Islands has finally been added to the blacklist, the list itself still proves wholly inadequate. EU governments have let Bermuda, British Virgin Islands and the Bahamas – some of the world’s most harmful tax havens – off the hook. These countries run an unfair tax competition and lead the race to the bottom in corporate tax by offering zero-tax, or very low tax rates, so that companies avoid paying their fair share.

“The credibility of the blacklisting process is also undermined by tax havens in the EU. They are exempted from the screening despite failing the EU criteria and offering sweetheart tax deals to companies.

“Tax havens deprive poor countries of over $100 billion every single year, fuelling inequality and poverty.  They need to stop poaching tax revenues from other countries by making sure companies registered in their territory actually do business there and pay the right amount of tax.

“The EU needs to strengthen its blacklisting criteria, put its own house in order and push for an ambitious and effective minimum tax rate at global level.”

Ends

Notes to editors:

• Today European Finance Ministers published an official review of the EU list of non-cooperative jurisdictions, screening 95 countries. 12 countries were listed on the blacklist and 13 countries on the ‘grey list’.
• The Bahamas, Bermuda and the British Virgin Islands have been identified by Oxfam as important tax havens and are also among the top-10 countries in Tax Justice Network’s Corporate Tax Haven Index. These countries were completed delisted by the EU. 4countries were added to the list.
• One year ago, Oxfam GB published the briefing paper Not Enough Substance? Assessing changes made by UK-linked tax havens to fulfil EU requirements, arguing that the UK, working with the EU, should ensure that UK-linked tax havens such as Bermuda and the Cayman Islands, commit to more fundamental reforms and greater transparency.
• An Oxfam briefing on the EU blacklist review can be found here background briefing
• A minimum effective tax rate is currently being discussed by the OECD Inclusive Framework as part of negotiations for global tax reforms. A minimum effective tax rate should be set at an ambitious level and applied at a country-by-country basis without exception. Such a minimum tax rate would put a stop to the damaging tax competition between countries and remove the incentive for profit shifting – effectively putting tax havens out of business. For more details, read Oxfam’s opinion on the OECD’s proposal and Oxfam’s submission to the OECD public consultation.