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VI could face EU sanctions over its offshore sector

- Cayman Islands, Turks & Caicos Islands, Anguilla & Bermuda also flagged
September 30th, 2016 | Tags: tax crackdown EU tax jurisdictions Virgin Islands Brexit
The Virgin Islands is listed among eight British overseas territories and crown dependencies that could face EU economic sanctions for having low or no corporation tax. Photo: VINO/File
The Cayman Islands could also face sanctions by the EU. Photo: The Guardian
The Cayman Islands could also face sanctions by the EU. Photo: The Guardian
ROAD TOWN, Tortola, VI- The Virgin Islands is listed among eight British overseas territories and crown dependencies that could face EU economic sanctions after Brussels identified them as having low or no corporation tax.

According to an article published in The Guardian on September 16, 2016, experts have published a scorecard showing red flag warnings set against a list of the 81 countries that may attract companies or individuals seeking to avoid or evade European taxes.

Others include Jersey and the Cayman Islands.

The scorecard will be discussed among member states before a shortlist of countries is selected for further screening and whittled down to a definitive EU list of tax and secrecy havens, to be published at the end of next year.

In the meantime, according to the article, discussions are under way as to sanctions that the EU could impose on countries included in the final list. Options being discussed include the introduction of additional taxes, known as “withholding taxes”, or the removal of tax deductions.

In a paper published in January, the commission said: “This would make it much less attractive for companies to invest or do business in these jurisdictions.”

Several countries apply such defensive measures to protect their tax base from tax havens. But Brussels hopes that the prospect of a coordinated move by EU member states would send a strong signal of Europe’s determination to address tax avoidance and evasion.

Tax jurisdictions flagged

Of the 10 jurisdictions flagged on the scorecard for their low tax rate, eight are British overseas territories or crown dependencies: Anguilla, Bermuda, the [British] Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey and the Turks and Caicos Islands.

The UK’s ability to influence discussions about which jurisdictions make it on to the final tax haven list will be limited following the Brexit vote. Britain has previously fought hard to protect the interests of crown dependencies and overseas territories in Brussels.

As well as red flagging countries with low tax rates, the European commission scorecard highlights 57 jurisdictions, including Hong Kong, Panama and Qatar, over concerns about low levels of financial transparency. There are 51 countries, including Barbados, Mauritius and Curacao, flagged for using “preferential” tax regimes to attract investment.

Pierre Moscovici, the European commissioner for economic and financial affairs, said: “The EU takes its international tax good governance commitments seriously. It is reasonable for us to expect the same from our international partners. We want to have fair and open discussions with our partners on tax issues that concern us all in the global community. The EU list will be our tool to deal with third countries that refuse to play fair.”

Gibraltar, Niue and Vanuatu are among several jurisdictions that do not appear on the EU scorecard, but they are nevertheless thought likely to feature in discussions among member states and may appear on the final list of tax havens.

Meanwhile, Premier and Minister of Finance Dr The Hon D. Orlando Smith could not be reached for comments up to time of publication.

8 Responses to “VI could face EU sanctions over its offshore sector”

  • DroNe (30/09/2016, 07:54) Like (0) Dislike (2) Reply
    Sick of the EU now. Hurry up with that Brexit process, prime minster May.
  • Treasury (30/09/2016, 08:01) Like (2) Dislike (1) Reply
    The Offshore financial services concept is finished, most jurisdictions have recognized this and are moving on and investing in new industries including medical research, e-gaming, e-commerce, space and advanced engineering. Wake up sleepy and fast otherwise all the beds will be taken.
    • ThemDevils (30/09/2016, 14:24) Like (1) Dislike (0) Reply
      Maybe we should sell cocaine, I never understood why Columbia didn't have the right to sell what they hell they wanted. Play by their rules is the name of the game. one day the shoe will be on the other foot, meh hope them enjoy. Teach your kids so they never forget and they understand the need to repay that evil debt!!!
  • The Eye (30/09/2016, 08:11) Like (2) Dislike (0) Reply
    they want us to eat rocks
  • Boo (30/09/2016, 08:57) Like (3) Dislike (0) Reply
    Smithy sleeping on the job. No innovation, no vision while the BVI perishes Smith sleeps.
  • ppp (30/09/2016, 12:07) Like (0) Dislike (2) Reply
    wrong leader u meant ralph...more happened under the NDP..
  • PaleManGreed (30/09/2016, 12:38) Like (0) Dislike (1) Reply
    These people create and economic system that can be very challenging for countries with few natural resources to compete and when you find a way in and pinch a little off they want to come a take back the little crumbs!!!!!
  • james (03/10/2016, 09:06) Like (0) Dislike (0) Reply
    The EU countries are trying to collect money to fund their socialist domestic programmes. You only need look at Germany and the influx of Syrians.

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