The European Union (EU) has released a blacklist of 17 countries which it says are tax havens. The countries and regions included could potentially face sanctions for failing to bring their standards in line with the bloc, as the EU seeks to further step up its fight against opaque practices that facilitate avoidance by multinationals and individuals.
The group of jurisdictions, which was rubber stamped by EU finance ministers at a meeting in Brussels yesterday, includes South Korea, Panama, Bahrain, Tunisia and the United Arab Emirates, as well as Barbados, Samoa, American Samoa, Grenada, Guam, Macau, the Marshall Islands, Mongolia, Namibia, Palau, St. Lucia and Trinidad and Tobago, according to the EU.
The final list is the result of months of screening on dozens of countries and territories, and back-and-forths between the 28-country bloc and various jurisdictions around the world. It could still change depending on the ministers’ political decisions. Ministers decided that 17 countries will be blacklisted, while another 47 will be included in a separate gray list, to be monitored for their compliance with commitments undertaken.
It comes as the EU has stepped up its efforts in recent years to tackle tax avoidance and evasion around the world – plans that have received fresh impetus following leaks such as the recent Paradise papers, which exposed the large scale of tax avoidance and fed public backlash against such practices.
Throughout the past year, experts from the bloc have been screening 92 jurisdictions to identify whether they met the EU’s standards for transparency or whether they engaged in harmful tax practices.
The Secretary for Economy and Finance, Lionel Leong reacted saying that Macau is by no means a tax haven or a territory where tax evasion is allowed. According to Leong, the MSAR authorities are enrolled in active cooperation with the international community to combat such practices and promote tax justice.
Leong reiterated that the MSAR Government has communicated and contacted the Organization for Economic Co-operation and Development (OECD) and the EU on tax matters and will continue to improve legislation in order to create new international rules.
Asked to comment on media reports that mentioned the inclusion of Macau in the EU’s black list of tax haven countries and regions, Leong said that the government will follow the case.
The Secretary said that the government is working on the possible extension of the “Multilateral Convention on Mutual Assistance in Tax Matters” to Macau. According to Leong, after the convention is applied to Macau, the region could carry out automatic exchange of information with EU member states. In addition, he said that the government is also studying the review and finding ways to improve the tax system for offshore institutions.
The Government Spokesperson’s Office issued a statement late last night saying the decision to include Macau in the list was “unilateral, partial and does not reflect the real situation in Macau.” MDT/Agencies
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