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CURRENT STATUS OF THE FIGHT AGAINST TAX HAVENS IN EUROPE
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excluded some of the “most innovative” harm-
ful tax practices, such as the patent box regimes
used in some member countries or the special
regime for notional interest deduction.
In any case, a new feature of the latest
European list of tax havens is that evaluation of
harmful tax regimes will be performed by the
Group, not only with respect to Member States,
as has been the case to date, but also in relation
to third-party states that could be included in
the list. In fact, as we will see below, the Group
will play a fundamental role throughout the
process of compiling and regularly updating the
list of territories to be included or excluded.
The other aspect of the fair taxation criterion
relates to the facilitation by the jurisdiction in
question of offshore structures which do not
conduct any activity in the territory, and whose
purpose is to attract profits generated in other
countries. This is a fairly broad, and rather
vague, definition, which has the disadvantage
of leaving a lot of scope for interpretation by
the evaluating body, primarily the Code of
Conduct Group.
It is true, however, that once a tax regime
permitting the creation of offshore structures
has been developed, the jurisdiction concerned
is required to eliminate it immediately if it wish-
es to avoid being included in the blacklist. Here
(in contrast with the criterion of transparency) a
mere “formal declaration” that this regime will
be eliminated in the future is not sufficient.
Finally, it is unfortunate that ECOFIN has not
specified the existence of a corporate tax rate at
or close to zero per cent as a separate criterion
which, on its own, would justify immediate in-
clusion of a territory on the blacklist. The solu-
tion chosen, instead, is to include this as a sub-
category of the fair taxation criterion, with the
effect that – in order to be included in the list
– in addition to a zero or near-zero rate, the ju-
risdiction in question must have facilitated the
creation of offshore structures with no econom-
ic substance.
Implementation of BEPS programme minimum
standards
The third criterion relates to the third-party coun-
try’s commitment to implement minimum stand-
ards issued by the BEPS process led by the OECD
over recent years, under the G20 mandate. The
Base Erosion and Profit-Shifting programme is
the first serious attempt to reform the interna-
tional tax system to address the problem of ag-
gressive tax planning by multinationals. After
identifying 15 areas where there is particular risk
of corporate tax evasion, the BEPS programme
has produced a series of reports which contain a
range of anti-abuse rules. These reports are in-
tended to be developed by states in their domes-
tic legislation, but not all of them have the same
legal status. The BEPS reports with the greatest
legal weight for states are the ones mentioned by
the third criterion of the European list, which es-
tablish minimum standards.
5
Although, initially, the aim was to cover all
the gaps in the international tax system, the fi-
nal result of the BEPS programme has only rep-
resented a first step in this direction, and this
will have to be supplemented by further reforms
in the future. Some developing countries who
are not G20 members (and many civil society
organizations) have questioned whether this
next stage should be conducted within the
framework of the OECD or under the auspices
5
The other BEPS reports merely establish shared meth-
odologies or best practice, and signatory states do not
acquire any commitment to adopt the recommendations
they contain.