The commission has announced guidelines, backed up by legislation, it says deliver on its pledge to ensure that the blacklist is backed up with effective countermeasures.
It says the measures “mark the first step” in stopping the movement of EU funds through blacklist jurisdictions.
“They [the guidelines] will ensure that EU funds do not inadvertently contribute to global tax avoidance,” the commission said.
‘Wake-up call’
The sanctions, announced by the commission on 22 March, focus on EU external development funds, and aims to stop them being channelled or transited through entities in countries on the blacklist.
The first blacklist was published in December 2017 and contained 17 jurisdictions, but eight were removed after one month.
Currently, the Bahamas, the US Virgin Islands, St Kitts and Nevis, Trinidad and Tobago, American Samoa, Guam, Namibia, Palau, and Samoa are on the list.
Last week Panama, Uruguay, Peru, Aruba and Belize, which appear on the so-called EU tax haven grey list, had their tax commitments published by the EU.
Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs union said the commission will not allow EU funds to contribute to global tax avoidance.
“These EU level countermeasures should act as a wake-up call for those jurisdictions as they show the EU is serious about tackling tax avoidance on a global scale,” Moscovici said.
Blacklist sanctions
The guidelines provide information on how EU members should assess projects that involve entities in jurisdictions listed on the blacklist.
Further, the sanctions include a series of checks that should help EU jurisdictions pinpoint a risk of tax avoidance with a business entity.
“For example, before channelling funding through an entity, it should be established that there are sound business reasons for how a project is structured that do not take advantage of the technicalities of a tax system or of mismatches between two or more tax systems for the purpose of reducing a tax bill,” the commission said.
The Commission also called on international financial institutions and other bodies involved in the management of the EU budget to review their internal policies on non-cooperative jurisdictions in the course of 2018.
Maria Madrid says:
The Isle of Man, a notorious off-shore haven, is on the EU “Grey List” … when will long overdue sanctions be applied to it?