EU governments are on the brink of agreeing a tax haven blacklist that could ensure corporate tax havens face international sanctions for the first time. This is a welcome move if the list includes objective and comprehensive criteria instead of focussing solely on opacity of tax systems, said Oxfam today. The organisation is calling on EU member states to ensure the blacklist criteria are sufficiently robust for the list to be a useful tool in the fight against tax dodging.

EU finance ministers will meet in Brussels tomorrow to discuss, and potentially adopt, criteria for producing a European blacklist of tax havens along with a shortlist of countries to be assessed against these criteria.

While proposals for the EU blacklist are a distinct improvement over other lists – including a planned G20 blacklist – Oxfam has a number of concerns about it:

The EU has already made clear the blacklist will not include EU countries. This means several EU member states identified by Oxfam as being corporate tax havens – among them the Netherlands, Belgium, Cyprus and Luxembourg – will not feature on the list.

Many EU leaders are also willing to exclude countries such as Switzerland because it is engaging with the EU on issues relating to financial transparency – despite the fact that Switzerland is also an obvious corporate tax haven.

The EU blacklist may also exclude notorious tax havens such as Bermuda if member states fail to agree on a zero percent corporate tax rate as a key criterion for the list. Research by Oxfam found that US multinational companies reported US$80billion in profits in Bermuda - more than their profits reported in Japan, China, Germany and France combined.

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Esme Berkhout, tax policy advisor for Oxfam said:

“Tax havens are helping big business cheat countries and their citizens out of billions of dollars in tax every year. By starving countries of money needed for education, healthcare and job creation tax havens are exacerbating poverty and inequality across the world.

“If the EU blacklist is to be a useful tool in the fight against tax dodging, and not just a gimmick, politicians can’t afford to fudge it. Tax blacklists can only work if they are based on objective, comprehensive criteria - including whether or not countries are offering zero rates of corporate tax and other unfair tax incentives.”