The EU flunks the tax haven test

The Tax Justice Network today expresses its deep frustration at the lack of effective action being taken by the EU following the publication of its so-called tax haven blacklist. Commenting on the publication of the list, Alex Cobham, chief executive of the Tax Justice Network said:

“The EU has today missed a great opportunity to tackle the real issues lying behind the large-scale tax avoidance and tax evasion that is bleeding EU countries dry.

“Rather than have a list of tax havens based on an objective set of criteria, as originally envisaged, the list appears to be a political fix with EU members picking their least favourite countries to name and shame. The result of the flawed blacklisting process is a politically led list, that includes only the economically weak and politically unconnected.

“While EU members like the Netherlands, Ireland and Luxembourg are the greatest procurers of global profit shifting but are excluded; and while the UK has sought to frustrate the blacklisting of its Crown Dependencies and Overseas Territories at every turn, the list is hard to take seriously.

“The public has had enough of governments saying they will do better. Real action is needed. It is completely pointless to have a blacklist with no sanctions. Tax avoiders, and the countries that sponsor them will all be letting out a sigh of relief today.

“The Tax Justice Network today reiterates our call for a global convention on tax and transparency, to create a level playing field that treats all jurisdictions fairly – and provides the basis for meaningful sanctions to end tax haven behaviour once and for all.”

Notes to editors

• The EU has today published its list of non-cooperative jurisdictions for tax purposes. The list names 17 countries.
• A further greylist of 47 countries has also been announced. These are countries which do not meet European Standards on tax and transparency, but have committed to improve.
• Research published by the Tax Justice Network on the EU list found that 41 countries should be on the blacklist according to the EU’s own criteria. That research can be found here: http://datafortaxjustice.net/paradiselost/
• Wouter Lips who worked on the above report with the Tax Justice Network has produced some interesting data sets on how the EU blacklist and the Tax Justice Network’s recommended blacklist compare, available here.
• The Tax Justice Network estimates that more than $21tn in private assets are stashed offshore.
• TJN also estimates that $500bn a year is lost to tax avoidance by multinational companies.