21st December 2017
As the fallout from the Paradise Papers continues, the EU has announced its first ever tax haven blacklist of countries it deems to be failing to meet wider international standards in the fight against fraud.
Tax haven blacklist: who made the cut?
In total 17 countries were named and shamed for a lack of transparency on taxes and a failure to demonstrate sufficient commitment to driving change. Those on the blacklist are:
- American Samoa
- South Korea
- The Marshall Islands
- St Lucia
- Trinidad & Tobago
- The United Arab Emirates
A further 47 countries were named in a ‘greylist’, which consists of those that are currently failing to meet the required criteria, but that had made moves to change tax laws to rectify this. This list includes the British overseas territories and crown dependencies of Jersey, Guernsey and the Isle of Man.
A step towards recovering billions
The publication of this list is the first step in the EU’s attempt to halt the lose of vital funds which estimates suggest equate to around £506 billion each year. However, while those on the list will now no longer be eligible for EU funds, no financial sanctions were agreed. This has certainly caused some controversy, with commentators claiming that the response is ‘insufficient’ given the sheer scale of evasion worldwide.
However, a Treasury spokesperson was quick to defend this latest move: “Today’s publication marks an important step in our ongoing efforts to tackle tax avoidance and evasion internationally. This is clearly working, as over 40 jurisdictions have made significant commitments to reform as part of this process. For those that are on today’s list, we hope that this increased scrutiny and the potential for counter-measures will lead them to reconsider their approach.”
International operations complex
While this is certainly a step in the right direction, it is a small move against a large-scale issue. As authorities across the globe continue to demonstrate their commitment to tackling tax fraud, the legal landscape of placing contractors across borders will, without doubt, become evermore complex. Staying ahead of changes to ensure full compliance and reduce risks to your recruitment firm will be challenging. By investing in expert contractor management solutions, you can rest assured that this risk is being managed for you, leaving you and your team to get on with the job at hand.
Contact us today to find out how we can help your business.