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EU to decide on tax haven blacklist, assess U.S. tax reform

Reuters  |  BRUSSELS 

By Francesco Guarascio

BRUSSELS (Reuters) - European Union ministers plan to adopt a blacklist of havens and assess the impact of the United States' planned overhaul in a meeting on Tuesday in Brussels.

After multiple disclosures of offshore avoidance schemes by companies and wealthy individuals, the launched a process in February to list havens in a bid to discourage setting up shell structures abroad which are themselves in many cases legal but could hide illicit activities.

"There will be, I hope, a blacklist that will include about 20 countries that despite ten months of talks have not made the necessary commitments," commissioner Pierre Moscovici told reporters as he arrived at the meeting in Brussels.

A second "grey" list of jurisdictions who have committed to change their rules to abide by standards on transparency and cooperation will also be adopted, although it is unclear whether it will be public.

Moscovici said the "grey" list will include about 40 countries. No names of jurisdictions included on the blacklist or grey list have so far been disclosed.

The final listing could be trimmed by ministers. They will also have to decide on sanctions for blacklisted countries. states have not been screened and will not be on the list.

The commission said none of the 28 members of the bloc can be classified as a haven, as all have agreed to respect standards.

But anti-poverty and fair groups said that if screened against criteria, countries like Luxembourg, Malta, the Netherlands and Ireland would be in the list.

"The list cannot just comprise third countries, but must also contain certain jurisdictions," the German conservative vice-chair of the European Parliament's economic affairs committee, Markus Ferber, said in a statement on Tuesday.

At the meeting, ministers will also assess the impact of reform in the United States that would slash corporate from 35 percent to 20 percent.

Ministers will assess "whether all provisions are in line with WTO (World Trade Organisation) rules," the commission's vice-president Valdis Dombrovskis told reporters.

The topic was added to the meeting's agenda after the U.S. Senate approved the reform on Saturday.

Dombrovskis said ministers will look into the "potential effect on trade" of the planned overhaul, echoing concerns raised on Monday by officials.

Officials are concerned about possible double taxation of companies in the United States as a result of the reform.

ministers will also adopt a common position on taxation of tech corporations like Amazon or Facebook. They have been accused of paying too little in the by rerouting the booking of their profits to low-nations where they have set up headquarters, like Luxembourg or Ireland.

The draft text of the conclusions has been watered down under pressure from reluctant countries. The commission is expected to present proposals in the coming months.

(Reporting by Francesco Guarascio; additional reporting by Julia Fioretti; Editing by Janet Lawrence)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, December 05 2017. 16:23 IST