New season, new tax scandal. Bahamas Leaks, which was blown open by the International Consortium of Investigative Journalists on the evening of Wednesday 21 September, is too similar to Panama Papers to provide many new elements, but has vindicated the European Commission in its determination to fight tax optimisation and tax evasion.
"The leaks from the Bahamas are the latest proof of the enormous scale of global tax avoidance and evasion", said Commissioner for Taxation Pierre Moscovici, in a statement issued to the press on Thursday morning.
The Commission published an initial scoreboard last week, paying particular attention to 80 countries. "The Bahamas were identified as a high-risk jurisdiction for tax avoidance and tax evasion (…). Potential risks were identified in relation to tax transparency and the absence of corporate income tax", explained Commission spokesperson, Vanessa Mock.
"Just like the OECD list, ours will be based on international tax good governance standards – but it will go further. The EU list will also cover other important good governance issues, particularly fair taxation. This is essential to effectively protect member states' tax bases", Mock added.
The OECD does not feel that a zero rate is inherently problematic. Pascal Saint-Amans, Director of the OECD's Centre for Tax Policy and Administration, visited the Commission on Tuesday to ask it to come into line with the criteria ultimately retained for the international list (see EUROPE 11629). The Commission is calling for a more ambitious list that goes further than just working on the basis of transparency criteria. The OECD is working on its own list, to be published in July 2017, in which the jurisdictions will be assessed in accordance with three criteria: the implementation of the exchange of information upon request, the automatic exchange of information and participation in the multilateral convention on administrative assistance.
The Bahamas are not on the current international blacklist. The Commission has, moreover, already proposed revising the anti-money laundering directive to ensure that the names of the beneficial owners of certain trusts (engaging in commercial activities) are made public. Reactions to the scandal mainly centred around the fact that the name of the former Vice-President of the Commission, Neelie Kroes, cropped up (see other article).
However, several MEPs from the Panama Papers committee of investigation feel that their investigation could also cover these new revelations, as their mandate had been drafted so as to cover new developments. The EPP Group at the European Parliament reacted by arguing that tax evasion was a structural issue, not a personal one. It calls upon the Commission and the member states to speed up work on creating a European blacklist. "Kroes must answer for what she has done, but the Commission is not the only one to be asking. The states of the European Union that are hampering the fight against tax evasion by dint of minimalist agreements reached unanimously are called upon to show far greater progress in the fight for tax justice", said MEP Emmanuel Maurel (S&D, France). The NGO Eurodad said that the scandal was a timely reminder of the importance of a public register of trusts. (Original version in French by Élodie Lamer)