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EU attempts to divert attention from its own problems with tax haven ‘blacklist’

Added 05 Dec 2017

Tax justice campaigners today condemned an EU “blacklist” of tax havens which fails to include a single EU member state. The blacklist of 17 countries was published just a day after new findings showed a large group of EU countries have tax structures that multinationals can use to avoid taxes.

“Since the Panama Papers and recent Paradise Papers scandals, the EU has been very focused on blacklisting other countries as ‘tax havens’. However, that blacklist looks like an attempt to divert attention away from the fact that EU governments have failed to clean up their own house. The EU itself is central to the tax haven problem, and many European countries have tax structures that multinationals can use to avoid taxes – that’s deeply concerning,” said Tove Maria Ryding, tax coordinator at Eurodad, the European Network on Debt and Development.

“If EU governments really wanted to get rid of tax havens, they should be open about the fact that several EU Member States, such as Luxembourg, Ireland and the Netherlands, also have to fundamentally change their behaviour. Unless we put a stop to all tax havens, the problem is just going to move from one place to the other.

“The cost of corporate tax dodging is not just felt in Europe. Developing countries continue to pay a high price for a global tax system they didn’t create. Corporate tax income is a vital source of income for developing countries, who need money to fund schools and hospitals.” 

“We are also concerned about the criteria used to define the blacklist. The EU has started blacklisting countries that don’t follow the OECD’s rules - but that’s very different from being a tax haven. As several EU countries have shown, you can follow the OECD’s rules and still be a tax haven – and vice versa,” said Ryding.

Yesterday, a coalition of civil society organisations published Tax Games – the Race to the Bottom which shows average global corporate tax rates will hit zero by 2052. A detailed analysis of 17 EU member states and Norway reveals the majority have either just cut their corporate tax rate, or are planning to do so in the near future.