Moscovici asks ECOFIN to adopt black list – Commission to freeze EU funding for tax havens

New Europe / Alexandros Michailidis

European Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici speak during a public hearing on the paradise papers at the European Parliament in Brussels, Belgium, 28 November 2017

Moscovici asks ECOFIN to adopt black list – Commission to freeze EU funding for tax havens


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The European Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici called on the EU-28 to be “ambitious” during next week’s Council meeting, when decisions are to be made for the EU’s tax havens black list.

A couple of weeks since Paradise Papers came to light, and after almost one year of talks and negotiations after Panama Papers raised the subject for a need of an EU tax havens black list in the wake of disclosures of off-shore tax avoidance schemes by corporations and wealthy EU citizens and VIPs, the finance ministers of the bloc will have to adopt the list and the sanctions that the third countries will be subjected to. The decision is expected by the Commission to be finalised until the end of the year, as public pressure following the Panama and Paradise Papers leaks is high in Brussels.

Speaking at the Panama Papers Committee of the European Parliament, Moscovici invited the EU governments to adopt list and sanctions: “I invite member states to urgently adopt before the end of the year the European list of jurisdictions that refuse to reform their tax rules to comply with European standards,” Moscovici told MEPs during the Paradise Papers hearing.

So far, the EU member states have screened 92 jurisdictions worldwide against a set of criteria meant to measure tax transparency, use of harmful tax practices and cooperation on fiscal matters. However, even some EU member states have not changed their tax rules after EU pressure, while “half (of the remaining 92) have committed to do so in 2018” according to Moscovici.

“The Paradise Papers have highlighted the extent of the fraud to the TVA in some jurisdictions on goods such as yachts,” added the Commissioner, underlining that this is a problem where “the solution is easy. If the law allows it, then we should change the law.”

Moscovici to member states: Apply the new rules – shoulder the responsibility

As the pressure towards the EU executive was high and critical from MEPs that questioned the Commission’s intentions, Moscovici rather suggested that it is up to the member states to apply the new anti-tax avoidance rules and “shoulder the responsibility”.

“I want to be extremely clear about the respective responsibilities: this list of tax havens will be that of the member states,” added the Commissioner. According to Moscovici, “the Commission will propose to have strong and dissuasive sanctions,” adding that funds provided by the EU budget, the European Bank for Reconstruction and Development and the European Investment Bank could be frozen for countries on the tax haven list.

Acknowledging the damaging extent of aggressive tax planning in the bloc, Moscovici tried to convince MEPs that an EU black list without EU member stated toed not mean that there aren’t damaging tax practices in the EU. “There are damaging tax practices in EU but EU tax havens won’t be on the blacklist,” he said, but this does not mean that there aren’t criteria. “We can’t characterize member states as tax havens,” added the Commissioner, refusing to comment on Oxfam’s tax haven criteria. “ can’t comment because I am not aware of the black list”, but Oxfam’s interpretation is “beyond standards” according to the EU executive.

However, MEPs suggested that if EU criteria were applied to EU countries, some of them, such as Luxembourg, the Netherlands, Malta and Ireland, would end up being part of the black list, dooming the process from its outset at a Council level.

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