Fair Taxation: Commission launches work to create first common EU list of non-cooperative tax jurisdictions // Brussels, 15 September 2016

78. Stresses, however, that the OECD’s work on its former list of uncooperative tax havens was based on a political process which led to arbitrary compromises already when setting the criteria for the lists, such as the requirement to conclude tax agreements with 12 other countries, and resulted in no jurisdiction being listed as an uncooperative tax haven; stresses that its current approach is still based on criteria which refer to tax transparency and the exchange of information, and are not comprehensive enough to address the harmfulness of certain tax practices; notes that, whatever its merits, this limits the relevance of the OECD ...[+++]’s approach to identifying those tax jurisdictions which are pillars of tax avoidance practices and harmful tax competition worldwide; stresses, in particular, that this approach does not refer to any qualitative indicators for an objective assessment of compliance with good governance practices or consider quantitative data such as book profits, incoming and outgoing financial flows and their (dis)connection from the economic reality in a given jurisdiction;

76. Stresses that tax competition is far from being limited to the Member States, including their dependent or associated territories, and that most practices under consideration have an international dimension, through the shifting of profits to low- or no-tax or secrecy jurisdictions where, often, no substantial economic activity takes place; deplores the lack of a coordinated approach on the part of the Member States vis-à-vis all those jurisdictions, not only in terms of joint action or reaction against their harmful practices, but also, despite the Commission’s efforts, regarding their identification and the relevant criteria; str ...[+++]ongly supports, therefore, the Commission’s 2012 proposal, which includes substantial criteria for ensuring fair competition in addition to transparency and the exchange of information, as well as the recent publication, in the Commission’s tax package of 17 June 2015, of a list of non-cooperative tax jurisdictions, established following a ‘common denominator’ approach on the basis of lists existing at national level; stresses that the establishment of such a list is a prerequisite for taking appropriate action against such jurisdictions; believes that this list should be the first iteration of a process that results in a rigorous, objective definition of ‘tax havens’ which can then inform future lists, established on the basis of clear criteria that should be known in advance; encourages the Commission to assess whether European jurisdictions comply with these criteria;

Clarified provisions on audits: in Article 122. A situation where any competent authority can initiate an audit of the whole group or part of the group irrespective of tax jurisdiction would lead to unacceptable administrative consequences.

Unfortunately, neither the Commission nor MEPs are suggesting that Member States embark on tax cuts or fundamental corrections that might bring about transparency in tax jurisdictions.

1. Total tax evasion in all tax jurisdictions of the European Union amounts to around EUR 200 billion annually.