The European Commission plans actively to fight tax havens. It blocked the European Investment Bank (EIB) from financing no fewer than nine projects in 2016.
It all started in January 2016, when the Commission adopted its external strategy for effective taxation. It warned that counter-measures must be adopted for third countries refusing to cooperate included on the list of non-cooperative third countries. This process was then launched between the member states. The list is to be ready by the end of this year.
However, the Commission did not intend to let the grass grow under its feet. In March 2016, it wrote to the EIB with a little food for thought, suggesting a few measures to ensure that European money is spent wisely. Among these measures, it recommends that for jurisdictions with low or zero corporate taxation, the Governing Council of the EIB verify that the structures in place were not created solely in order to benefit from a tax advantage, but for valid commercial reasons.
In June of the same year, the European Commissioner for Taxation, Pierre Moscovici, once again called on the EIB to avoid using no/zero tax jurisdictions. “Despite significant progress, there is still a high and immutable risk that such jurisdiction could be used for tax avoidance purposes”, he wrote in a letter of which EUROPE has had sight. This letter even refers to financing transiting through the Channel Islands.
According to our information, the Commission has taken action 18 times since the end of 2015 and blocked nine projects in 2016, for a total EIB funding of €1 billion. The financing in question was to have transited via the Cayman Islands, Jersey, Guernsey, Panama, Bermuda and, more recently, Lebanon.
Once the European blacklist of non-cooperative jurisdictions in taxation matters is adopted, it will become applicable to EIB activities, a bank source told us. (Original version in French by Élodie Lamer)