EU Accused Of Tax Blacklist Hypocrisy

by Ulrika Lomas, Tax-News.com, Brussels

11 December 2017

An umbrella body for non-governmental organizations in Finland has criticized the European Union for not including member states on its tax blacklist when several EU countries have laws in place that encourage corporate tax avoidance.

According to a recent report by KEPA, a platform for NGOs working in the area of global developments, nine out of 18 EU member states studied have "laws or practices" in place that enable large companies to avoid taxes. However, it observed that no EU member states appear on the new blacklist.

"Member states that allow tax evasion can enjoy the benefits of the internal market, but they do not have the risk of being blacklisted," said KEPA Tax Advisor Lyydia Kilpi.

17 jurisdictions feature on the EU list of non-cooperative territories in the area of taxation, published on December 5, including American Samoa, Bahrain, Barbados, Grenada, Guam, Macao, the Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, South Korea, Trinidad and Tobago, Tunisia, and the United Arab Emirates.

A further 47 countries have committed to address deficiencies in their tax systems and to meet the required criteria, following contacts with the EU.

KEPA also claims that if the "race to the bottom" on corporate tax continues at its current pace, corporate tax rates could reach zero percent by 2052.

KEPA suggested that the issue of tax avoidance should be treated as seriously as climate change and that global tax conferences should be held on an annual basis.

"We need to stop the inequality of deepening tax competition and to step up action against aggressive tax planning," said Kilpi.

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