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World

AFP
December 7, 2017

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States on EU tax haven blacklist voice anger

States on EU tax haven blacklist voice anger

PARIS: Several countries protested Wednesday against their inclusion on a European Union tax haven blacklist, with some calling the move “unfair” and others accusing Brussels of “meddling”. The EU on Tuesday unveiled a list containing 17 non-EU states a year on from the leak of the “Panama Papers” — a massive amount of data from a prominent Panamanian law firm showing how the world’s wealthy stash assets. South Korea, Macau, Mongolia, Tunisia and Namibia on Wednesday joined Panama in condemning the EU move.
Panama protested late Tuesday by recalling its ambassador to the EU for consultations with President Juan Carlos Varela slamming the measure as “unfair” while economy and finance minister, Dulcidio De La Guardia, tweeted his rejection of an “arbitrary and discriminatory” decision. South Korea’s finance ministry also reacted angrily after it too was placed on the list. “The EU said that a number of tax subsidy measures offered by the South Korean government on foreign investments, including those at our free economic zone, could be considered ‘preferential tax regime’.
“But the decision by the EU not only runs counter to international standards including the OECD standards, as well as international agreement but also may infringe upon tax sovereignty,” said the ministry. The ministry insisted that South Korea had “demonstrated a high level of transparency in taxation operations” hence would “actively respond” to the EU move. - Misunderstanding - Mongolia’s finance minister dubbed his country’s inclusion as a “misunderstanding.” “This is a misunderstanding. We are not on an offshore list,” Khurelbaatar Chimed told AFP. He said his country had only been named because “it is difficult to have tax-related information and data” after Brussels contacted his ministry in June for information about European residents with bank accounts or investments there.
“The EU decision showed us that we need to... build a transparent tax system and to connect with other countries.” Gambling hub Macau also objected to its designation, saying the decision is “one-sided and does not reflect the real situation”. A government statement said the semi-autonomous southern Chinese city had been “actively cooperating” with the international community including the EU to combat cross-border tax evasion.
A Tunisian official told AFP the country was included notably over tax advantages for exporting companies based on its territory. The official stressed that “Tunisia refuses all meddling in its fiscal policy” and stressed its determination to maintain the advantageous tax regime for such firms. Tunisia’s bosses federation Utica expressed “surprise” at the EU decision it termed “dangerous” while urging dialogue with Brussels to resolve the issue. Namibia, meanwhile, called its inclusion on the list “unjust, prejudiced, partisan, discriminatory and biased”, according to Finance Minister Calle Schlettwein.
“Namibia is clearly, by any objective criteria, not a tax haven,” he said. No sanctions are in the offing for those countries named and shamed, though some EU members including France want tough measures including possibly an exclusion from World Bank or EU funding.

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