The European list of tax havens that is due to be published in 2017 may well go further than the transparency conditions used by the OECD.
In an annex to the six-monthly report from the Council’s code of conduct group on company taxation it is stated that non-EU countries would also be judged using fair taxation rules and performance in implementing the OECD’s BEPS measures to counter corporate tax-evasion. The document talks about fair as opposed to loyal tax competition. The annex explains that a distinction needs to be made between damaging fiscal practices that are the code of conduct group’s bread and butter and tax competition and the question of very low or zero tax rates. The document says that in order to most effectively remedy erosion of tax bases and the transfer of profits, it would make sense to add a substantive criterion covering a low or zero general corporate tax rate.
At this stage, the text is due to be stabilised in December. It currently says that for tax of below x%, non-EU countries would have to demonstrate that they do not facilitate offshore structures aimed at attracting profits which do not reflect real economic activity in the jurisdiction.
When it comes to implementation of BEPS measures, an initial criterion would be that the jurisdiction would pledge to do so. A later criterion would be that the jurisdiction is positively assessed by the system set up to monitor implementation of BEPS measures.
When it comes to transparency, the same criteria are used as at the OECD, but countries would need to broadly comply rather than simply comply.
Consensus has, of course, not yet been reached on the list of criteria, which may be adjusted as talks continue. (Original version in French by Elodie Lamer)