Four jurisdictions on the European blacklist of non-cooperative jurisdictions in taxation matters tried but failed to stay off or get themselves removed from the list following its creation in December 2017 according to a document of the Council 'code of conduct' group on corporate taxation dated 29 January obtained by the Greens/EFA group in Parliament (see EUROPE 11945).
These jurisdictions - the Marshall Islands, Namibia, St Lucia and Samoa - submitted letters containing commitments deemed insufficient by the EU.
For instance, the document shows that a letter from the Namibian finance minister, Call Schlettwein, dated 8 December, made no promises but simply states that Namibia was considering the idea of taking the steps called for by the EU to comply with its taxation standards.
A letter dated 18 January from the secretary of state for finance of the Marshall Islands, Maybelline Andon-Bing, contained no new commitments, according to the document. The same goes for Samoa. As for St Lucia, the letter received by the Europeans reportedly indicates a commitment to abolish regimes deemed harmful by the end of the year, without specifying the regimes to which it refers.
“New documents of the 'code of conduct' group support our criticism of the process of putting together the European blacklist of tax havens. It certainly seems that some countries may have been favoured over others. Unless there is transparency, these suspicions of political arrangements cannot be dismissed”, said Eva Joly of France.
The Greens' criticism also targets Brazil and Georgia. In a leaked document of the 'code of conduct' group dated 13 October 2017, reference is made to a Brazilian tax regime considered harmful ('export processing zone'). “On the basis of the information received, the experts continue to consider such regime as harmful”, the 'code of conduct' group's document reads. “We invite Brazil to commit to amending or abolishing the regime”, it adds. However, Brazil ended up on neither the blacklist nor the 'grey' list of countries presenting problems, but having submitted commitments deemed satisfactory by the EU. According to our information, however, Brazil has provided the EU with the necessary clarifications.
In the case of Georgia, two regimes were deemed harmful. The expert group's document calls upon it either to make commitments, or provide evidence that these regimes are not harmful. Georgia does not ultimately feature on either list.
Other documents show that an expert member of the 'code of conduct' group blocked an agreement on questions of economic substance (presence of tangible activities and physical resources of a company), linked to cases of countries with a rate of zero or close to zero. According to our information, the United Kingdom is involved.
Another document dated 29 January asks the delegations how jurisdictions with low taxation rates should specifically respond to the concerns of economic substance. The commitments called for up to that point are somewhat vague. In a draft letter of one of the leaked documents, the 'code of conduct' group tells a jurisdiction with a zero rate that one way of responding to concerns could be “through the imposition of substance requirements” or the introduction of additional tax reporting obligations.
The documents obtained by the Greens/EFA also show that a grandfathering clause up to 2021 has been agreed by the Europeans for all regimes to be abolished in the countries examined by the EU.
Finally, a document dated 27 January shows that the process is only just beginning for the Turks and Caicos Islands. A series of questions was only sent to them on that date.
Moreover, it was by Wednesday 28 January that the tax jurisdictions affected by hurricanes were supposed to submit their own commitments to the Council.
The Greens/EFA had some questions for the Council of the EU and the Commission during a mini-plenary session debate held on Wednesday evening. EUROPE will return to this. (Original version in French by Élodie Lamer)