Under the leadership of the Socialists and Democrats, the European Parliament is set to adopt a proposal for greater transparency and stricter criteria for the EU’s tax havens list, to be adopted by the end of 2021 – the first ever resolution of the newly established tax matters sub-committee.

Pedro Marques, MEP and S&D tax matters co-ordinator, said:

“The criteria for the EU’s tax havens list are broken. It speaks volumes that notorious tax havens like Switzerland, Hong Kong or Jersey never made it onto the list and that in a shocking decision last year even the Cayman Islands were taken off the list. We want the EU tax haven list to become a tool with teeth to protect us from tax dumping. In the wake of Brexit we must be particularly watchful that we maintain a level playing field with the UK.

“For the EU tax havens list to become a tool with teeth, we must firstly include sharper economic indicators, such as a minimum effective tax rate.  The S&D Group is arguing for a minimum effective tax rate to put a floor on tax competition. Additionally, all countries with a zero tax rate must automatically be identified as tax havens. Secondly, the transparency of the whole procedure needs to be beefed up.  At the moment, the Code of Conduct Group – which is tasked with screening tax havens – meets behind closed doors and there is little public scrutiny. We call for greater involvement from the European Parliament in the process to ensure proper scrutiny and more transparency. Thirdly, the UK and its offshore territories must from now on be subjected to screening under the blacklist procedure to ensure we will not have a ‘Singapore-on-Thames’ at our borders. Aggressive tax planning would undermine a level playing field and a fair future relationship."

Paul Tang, S&D MEP, author of the resolution and chair of the tax matters sub-committee, said:

"In constructing the EU list of tax havens, the EU member states have forgotten one thing: actual tax havens. The countries on the list account for just 2% of total lost revenues. And the bad news is: it's not getting better. The list is getting worse. Big tax havens like the Bahamas, the British Virgin Islands and now the Cayman Islands have been taken off the list. Member states are failing European citizens, leading to total lost revenues of over €140 billion. Now more than ever we need every euro to invest in healthcare and to build a sustainable future for our young people by relaunching the economy. If others fail to tax European companies, EU governments must make themselves the tax collector of last resort. With our proposals we can transform the EU tax haven blacklist into a robust tool for fighting tax abuse and tax crime. We call on the Commission and Council to join our fight and deliver tax justice for our citizens.

“But the EU will only ever be credible as a leader for tax justice when it puts its own house in order. This is why EU countries need to be subject to the same rules and criteria as we impose on others. In this resolution, the Parliament commits itself to investigating and scrutinising all member states that are responsible for tax avoidance. The message to tax havens in and outside the EU is clear: the Parliament is coming for you."