Isle of Man hits out at ‘political’ EU blacklist of tax havens

Added 20th September 2016

Isle of Man chief minister Allan Bell has questioned plans by the European Commission to create a blacklist of non-EU tax regimes, branding the move as more to do with the “internal politics of Brussels” than greater transparency.

Isle of Man hits out at ‘political’ EU blacklist of tax havens

On 15 September, the EC released a ‘scoreboard’ of 81 non-EU states to help identify countries located outside the EU that enable tax avoidance. Those listed will be scored against three criteria; strength of ties with the EU, financial activity and stability.

There are also three risk indicators - transparency, preferential tax regimes and no or zero corporate rate tax.

However, Allan Bell criticised the move saying the crown dependency, an offshore tax haven popular for its zero corporation tax, is “still trying to identify what they are trying to achieve”, arguing that the scoreboard is not a blacklist but will in fact be used to compile and store data on each country’s tax regimes.

“Tax rates are matters for national governments and any move to list purely on the basis of tax rates runs counter to the international consensus.

“It is clear that this is not a blacklist. The Commission has instead chosen to create a long list of countries – which includes many members of the G20, including the US, China, Canada and Japan – for further examination

“The issues at play have less to do with greater transparency and more to do with the internal politics of Brussels.” he told Isle of Man Today.

Bell added that “the only area where we [Isle of Man] fall foul is our zero corporation tax regime”, which he defended, arguing that the island had the “absolute right to set our own tax rates”.

“Our tax structure was entirely transparent, and in terms of transparency, we comply with all international standards,” he said.

EU hypocrisy

The EU scoreboard features a number of countries considered to be offshore tax havens such as Panama, which found itself embroiled in a tax evasion scandal in April when more than 11 million documents leaked from a local law firm exposed how the rich and famous use offshore tax haven to hide their wealth from tax authorities.

Others include Hong Kong, Mauritius, a number of Caribbean islands including Belize and Bermuda, and British Overseas Territories, like the Cayman Islands and the British Virgin Islands.

However, Bell questioned the hypocrisy of the EU scoreboard, which fails to include EU countries such as Luxembourg and Germany, which have previously ranked higher on the Financial Secrecy Index ahead of countries like Panama.

“On this list is not one name in the EU which is quite astonishing,” said Bell.

In another example, despite being ranked first on the Financial Secrecy Index, Switzerland does not appear on the EU blacklist due to the nation’s own transparency agreements with the EU.

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EU bureaucracy

The EU will sink under its own weight of bureaucracy and will become an irrelevance as far as the world of International Financial Services are concerned.

Posted by: Kevin Jenkins, 26 Sep 2016

Perhaps nearer the truth than is comfortable

Perhaps if the IoM regulator was a little more diligent in administering Fund Managers they would not be as concerned with the spotlight being shone on their activities.....!!!

Posted by: Steven Speers, 26 Sep 2016

EU Hypocrisy

Well done to Allan Bell. The title of your paragraph EU Hypocrisy hit the nail on the head. This is nothing more than a desperate attempt by the "EU" to try and justify their ever increasing irrelevance. They (EU) might well consider looking closer to home at their own member countries who have an endemic and ongoing culture of tax evasion. Remember tax avoidance is not illegal. Tax evasion is.

Posted by: Adrian, 20 Sep 2016

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Monira Matin

Senior Reporter

Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.

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