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EUROPEAN UNION: Parliamentary committee demands blacklisting of low-tax jurisdictions

Monday, 13 November, 2017

The European Parliament's PANA committee, convened last year to examine the implications of the so-called ‘Panama Papers’ disclosures, has criticised the European Commission's slowness in producing a common EU list of 'non-cooperative tax jurisdictions'.

Earlier this year (18 October 2017), the Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA) said that EU countries are failing to fight money laundering and tax evasion, and criticised a ‘lack of political will among some member states to advance on reforms and enforcement.’

It has now produced a list of recommendations to be forwarded to the Commission and EU Council early next month.

The committee’s report highlights, ‘the urgent need for a common international definition of what constitutes an Offshore Financial Centre (OFC), tax haven, secrecy jurisdiction, a non-cooperative tax jurisdictions and a high-risk country in terms of money laundering’ – and suggests that these definitions should be internationally agreed and formally implemented.

Further, the recommendations include a demand that non-EU jurisdictions with low or zero corporation tax rates should be put on the list of non-cooperative tax jurisdictions, in order to combat base erosion and profit shifting (BEPS).

The committee also adds that when the list is in place, ‘the Commission should propose accompanying legislation determining harmonised obligations for tax authorities in every Member State to annually disclose data containing the total value and destination of the money transfers each Member State to each jurisdiction in that list.’