The European Union updated
this week its tax haven blacklist, adding ten jurisdictions and removing several from its grey list.
Aruba, Barbados, Belize, Bermuda, Fiji, Marshall Islands, Oman, the United Arab Emirates, Vanuatu, and Dominica were added to the list, which already included Samoa, Trinidad and Tobago, and the US territories of American Samoa, Guam, and the US Virgin Islands.
Thirty-four other countries remain on the grey list and have up until the end of the year to comply with the EU requirements or face being added to the blacklist.
These countries include Albania, Anguilla, Antigua and Barbuda, Armenia, Australia, Bahamas, Bosnia and Herzegovina, Botswana, British Virgin Islands, Cabo Verde, Costa Rica, Curacao, Cayman Islands, Cook Islands, Eswatini, Jordan, Maldives, Mauritius, Morocco, Mongolia, Montenegro, Namibia, North Macedonia, Nauru, Niue, Palau, Saint Kitts and Nevis, Saint Lucia, Serbia, Seychelles, Switzerland, Thailand, Turkey, and Vietnam.
Source: European Commission
Additionally, twenty-five jurisdictions were cleared as they fully complied with the EU’s demands.
These are: Andorra, Bahrain, Faroe Islands, Greenland, Grenada, Guernsey, Hong Kong, Isle of Man, Jamaica, Jersey, Korea, Liechtenstein, Macao SAR, Malaysia, Montserrat, New Caledonia, Panama, Peru, Qatar, San Marino, Saint Vincent and the Grenadines, Taiwan, Tunisia, Turks and Caicos, and Uruguay.
This is the newest development to a list that was first put together in 2017 following the Panama Papers and Lux Leaks scandals, with its main objective being the curtailment of tax avoidance and evasion.
While countries included in the list cannot yet be sanctioned in any way, their inclusion makes these jurisdictions face stricter controls when dealing with the EU.
For instance, explains
the EU in a press release, the blacklist “is now linked to EU funding under new provisions in the Financial Regulation and in the European Fund for Sustainable Development (EFSD), the European Fund for Strategic Investment (EFSI) and the External Lending Mandate (ELM)” and “funds from these instruments cannot be channelled through entities in listed countries.”
Furthermore, “under the new EU transparency requirements for intermediaries, a tax scheme routed through an EU listed country will be automatically reportable to tax authorities,” and “the public Country-by-Country reporting proposal also includes stricter reporting requirements for multinationals with activities in listed jurisdictions.”
The UAE was quick to criticize the EU for its inclusion in this updated tax haven blacklist.
An UAE official told
state news agency WAM, “This inclusion was made despite the UAE’s close cooperation with the EU on this issue and ongoing efforts to fulfill all the EU’s requirements.”
According to the official, the EU had been presented
with “a detailed timetable, including a series of actions that are being carried out, in line with sovereign legal procedures and constitutional requirements.”
“The UAE will continue to update its domestic legislative framework in this regard,” the official concluded
Furthermore, Abdulaziz al-Ghurair, Head of the UAE’s Banks Federation, believes
his country’s inclusions stems from a “lack of communication” between the parties involved.
, “We need to reach out, I understand the reasons, and I’m sure the UAE will want to play as a global citizen. And I’m sure in the near future this will be solved.”
David Daley, who is a Partner at Dubai-based Gulf Tax Accounting Group, believes the UAE’s inclusion will complicate matters for Emiratis looking to do business with the EU.
“The decision could impose laborious and time-consuming procedures for firms or people moving funds or buying property in the EU if they reside or earn in the UAE,’’ Daley said
Italy, who’s one of the UAE’s main trading partners, also criticized the EU for this decision.
According to TRT World, “Italy's far-right led government asked
the EU to place the UAE on a secondary 'grey list' of countries that have agreed to comply with the EU standards.”
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