The European Union economy ministers approved this Tuesday to remove the Seychelles from their list of tax havens, despite their role in the latest large-scale tax evasion scandal revealed by the 'Pandora papers'.

The Seychelles Islands are a jurisdiction with a stable and independent political and economic environment, this archipelago located in the Indian Ocean, does not present any capital gains tax, so a foreign company in Seychelles would perfectly be a tax-free offshore company.

The decision to remove them from the blacklist has been taken after the Global Forum agreed to review the note from the Seychelles Islands, the British Overseas Territory Anguilla and Dominica. Pending a final opinion from the OECD, the three territories are placed on the gray list of countries whose fiscal transparency is insufficient.

The three territories had been included in the list of tax havens because they do not respect the criteria of tax transparency of the EU. These criteria require a minimum score of "highly compliant" in the exchange of information on request in the classification prepared by the OECD Global Forum.

It has been reduced to just nine states on this EU list of tax havens and they are: American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the United States Virgin Islands and Vanuatu.

Also on the gray list are Costa Rica, Hong Kong, Malaysia, North Macedonia, Qatar, Uruguay and Turkey. For their part, Australia, Eswantini and the Maldives have applied all the tax reforms required by the EU and therefore leave the gray list
Oxfam's decision is a joke.

The EU blacklist should penalize tax havens. Instead, it sets them free. Today's decision to remove Anguilla, the only remaining jurisdiction with a zero percent tax rate, and the Seychelles, which are at the center of the latest tax scandal, turns the EU's blacklist into a joke. " Oxfam in a statement.

Let us remember that Oxfam is an international confederation made up of 19 non-governmental organizations that carry out humanitarian work in 90 countries. Their motto is "working with others to combat poverty and suffering"
"While the investigation of the 'Pandora papers' has revealed how the super rich continue to use tax havens to avoid paying their taxes, ordinary people are being asked to pay the bill for the recovery after Covid-19," laments Oxfam . This NGO denounces that almost none of the countries identified in the 'Pandora papers' as places where the rich hide their fortune appear on the EU black list. In fact, Seychelles is one of the most mentioned jurisdictions and it just came out.

In the opinion of the German green MEP Sven Giegold, who is part of the negotiating team for the future Berlin Government, the Economic and Financial Affairs Council (ECOFIN), lives in "the world upside down" for cutting the list of tax havens in instead of increasing it after the outbreak of the 'Pandora papers'. "The 'Pandora Papers' show that billionaires and powerful people use many tax havens that are not on the EU list," he said.

"Two-thirds of the 'Pandora Papers' front companies are in the British Virgin Islands, which are not on the EU's list of tax havens. The EU's list of tax havens is of no use in the fight against global tax fraud, "he lamented.

Before the end of the year

For its part, the European Commission continues to defend the usefulness of the black list of tax havens. "It is a process that is causing real change. For example, in response to EU concerns, around 130 harmful tax regimes have been removed worldwide, dozens of countries have improved their transparency standards, and many other countries have introduced new strict measures in this area ", said the spokesman for Taxation, Daniel Ferrie.

Regarding the revelations of the 'Pandora papers', the Community Executive presumes that in recent years it has launched an "ambitious agenda" to increase tax transparency and combat fiscal engineering. At the same time, he assures that he will not be "complacent" and will continue to "reinforce the European armor against tax abuses."

His next initiative will be a rule to combat tax avoidance through the use of shell companies, which will be presented before the end of the year.

"The fight against aggressive tax engineering is more crucial than ever to ensure that the costs of the coronavirus crisis are shared fairly among taxpayers and that Member States have budgetary space to support economic recovery," the spokesperson said.