Countries like the United Arab Emirates (UAE) and Bermuda have been added to a blacklist of alleged tax havens by the European Union finance ministers. The decision was made, despite warding off by some EU nations at the eleventh hour.
The agreement has now placed 15 jurisdictions on the list, which is three times the number of what it had right before the re-evaluation. The list was finalized a year after the EU consented to “name and shame” the countries involved in covert practices that promote tax avoidance by multinationals and individuals.
In a statement, EU Economic and Monetary Affairs Commissioner Pierre Moscovici said, “The blacklist has had a resounding effect on tax transparency and fairness worldwide.”
“The effort is to encourage tax good governance worldwide and curtailing the opportunities for tax abuse,” Moscovici added.
The countries on the EU list have “either failed to deliver on their commitments to remain true to the good-governance criteria, or did not comply at all,” as stated by the European Commission, the EU executive in Brussels.
The updated transgressors list consists of American Samoa, Samoa, Trinidad and Tobago, Guam, and US Virgin Islands, while countries like Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, Marshall Islands, Oman, Vanuatu and the United Arab Emirates (UAE), have recently made up to the list.
However, UAE’s entry on the list was a hot-button issue, as Italy and Estonia resisted incessantly to remove the nation from the final list, according to officials aware of the discussions.
The main objective of updating the tax-haven blacklist is to forebode the defaulter countries to align their tax frameworks pursuant to EU standards, to avoid being named and shamed.
“The listing process has ensured that dozens of countries have abolished harmful tax regimes and are conforming with the international standards on transparency and fair taxation,” Moscovici said.