Bermuda dodges EU tax-haven blacklist bullet
Bermuda has reportedly avoided being placed on an European Union blacklist after Britain blocked a French-led proposal that would have automatically branded the island a tax haven.
Territories with a zero per cent corporate tax rate, such as Bermuda and the Cayman Islands, would have been denounced as potentially “non-co-operative” under the proposed change.
Bloomberg News reported that the UK’s Chief Secretary to the Treasury David Gauke, attending a meeting of EU finance ministers in place of Chancellor Philip Hammond, teamed up with Ireland and Baltic nations in defeating the plan. It cited three EU officials, who asked not to be named because the talks were private.
The blacklist was one of a raft of measures the EU put forward earlier this year to tackle tax evasion in the wake of the leak of documents from the Panamanian law firm Mossack Fonseca that exposed billions of dollars hidden in tax havens around the world.
The EU’s work on the issue will proceed without specific reference to zero-per cent rate territories.
However, the 28-country trading bloc has not completely ruled out the inclusion of zero-rate tax jurisdictions on its blacklist and is seeking to complete the roster next year, Bloomberg reported.
A group of tax experts representing EU nations will study the feasibility of including them in a list of criteria. The UK and France accepted this compromise.
“In response to the scandal of Panama papers, we have reached a decisive stage with an agreement,” French Finance Minister Michel Sapin said after the meeting. “It is now essential to apply the criteria adopted for the preparation of this list to keep the deadlines we established.”
Bloomberg also reported that an unnamed British official said the blacklist “will encourage those few tax jurisdictions that refuse to follow internationally agreed best practice to do the right thing”.
Asked about the development, a Ministry of Finance spokesman said Bob Richards, the Minister of Finance, was “aware of ongoing developments in Europe and has an active and direct engagement strategy.
“He has visited the OECD Secretary-General and senior EC officials in Brussels. These meetings were a part of initiatives to promote a better understanding of Bermuda and its business model in the provision of financial services, adding value and stability to the global financial system.”