EU finance ministers agreed Tuesday on the criteria and process for establishing an EU list of tax havens, or non-cooperative jurisdictions in taxation matters, with a view to finalising a list by the end of 2017.
The finance council agreed criteria for screening third country jurisdictions; a process for selecting jurisdictions to be screened; and the guidelines for the screening process.
“Today’s agreement between all member states is an essential part of our joint EU strategy to combat global challenges such as tax base erosion and profit shifting,” said Slovakia’s finance minister, Peter Kazimir, for the EU presidency.
He said a dialogue would start with countries that fail to comply with the criteria “and only those jurisdictions refusing to cooperate and fulfil the criteria in due time will be placed on the so-called blacklist. Our primary goal is to incentivise, not to punish.”
Screening is expected to be completed by September 2017, with ministers endorsing the tax havens blacklist by the end of the year.
The initiative is a response to a January 2016 package of Commission proposals to prevent corporate tax avoidance, as well as the April 2016 Panama Papers revelations.
Ministers also discussed a package of proposals aimed at reforming the way companies are taxed in the EU.
Proposals for a common consolidated corporate tax base include a single rulebook for calculating taxable company profits throughout the EU, with the aim of closing off loopholes for corporate tax evasion. The package also includes a new system for resolving double taxation disputes, and measures to close down hybrid mismatches between member states’ and third countries’ tax systems.
On tax evasion and money laundering, the Council agreed on a proposal granting access for tax authorities to information held by authorities responsible for the prevention of money laundering.
The directive will require member states to enable access to information on the beneficial ownership of companies. It will apply as from 1 January 2018.