‘Even Malta should be included in EU tax haven blacklist’ says Oxfam

Global NGO says upcoming EU blacklist on tax havens should include Ireland, Luxembourg, Malta, and the Netherlands

The global NGO Oxfam said EU member states like Ireland, Luxembourg, Malta, and the Netherlands should be on the EU’s upcoming tax haven blacklist.

The four member states will be excluded because the list covers only non-EU jurisdictions.

The list will be announced next week by EU finance ministers, to be accompanied by potential sanctions.

In its report ‘Blacklist or Whitewash?’, Oxfam said the exclusions cast doubt on the credibility of the EU list. “EU governments have a choice between ending the harmful impact of tax havens on both the EU and developing countries - or whitewashing tax havens,” Oxfam’s Aurore Chardonnet said.

Oxfam’s detailed assessment claims that at least 35 countries should be expected to feature on the EU blacklist, namely Albania, Faroe Islands, Niue, Anguilla, Former Yugoslav Republic of Macedonia, Oman, Antigua and Barbuda, Gibraltar, Palau, Aruba, Greenland, Serbia, Bahamas, Guam, Singapore, Bahrain, Hong Kong, Switzerland, Bermuda, Jersey, Taiwan, Bosnia and Herzegovina, Marshall Islands, Trinidad and Tobago, British Virgin Islands, Mauritius, United Arab Emirates, Cook Islands, Montenegro, US Virgin Islands, Cayman Islands, Nauru, Vanuatu, Curacao, and New Caledonia.

“From the beginning, the EU list aimed to look only at countries outside the EU. This step strongly harms the credibility of the process, as EU member states such as Ireland, Luxembourg and the Netherlands are some of the most powerful tax havens in the world, enabling some of the biggest corporations in the world to pay minimal tax,” Chardonnet said.

This was also recently confirmed by the European Commission itself as a result of a series of landmark rulings against Apple, Amazon and Starbucks.

“Oxfam believes that the EU should put its own house in order when it comes to fighting tax evasion and tax avoidance and that EU countries should not be left off the list,” Chardonnet said with reference to Ireland, Luxembourg, the Netherlands, and Malta.

Malta is used to as a base for foreign multinationals to set up holding companies on the island and claim an 85% rebate on corporate tax paid, usually 35% of profits booked in Malta, to end up with an effective tax rate of 5%.

Aggressive tax planning was said to cost the developing world some €100 billion in lost revenues every year. The ICIJ has played a crucial role in uncovering the networks of global kleptocrats and tax avoiders through Swissleaks, OffshoreLeaks, Panama Papers, and the Paradise Papers.

Malta is not a secrecy jurisdiction, but computational scientists from the University of Amsterdam, analysing over 98 million firms across the world placed Malta in the top-10 list of countries dubbed “sink offshore financial centres” – that is, a country which attracts way more wealth than its economy can produce.

An EU so-called Code of Conduct group, set up by member states, is currently screening the jurisdictions of 92 non-EU countries to see who should be on the blacklist.

The group is using criteria based on transparency, fair taxation, and international efforts to tax profits where those profits have been made.

Oxfam applied those same criteria and came up with a list of at least 35 non-EU countries as well as the four member states.