European Union finance ministers have removed Belize from the blacklist of tax haven countries.
According to an EU document, “Belize has passed the necessary reforms to improve its tax regime for international business companies that were due to be implemented by end-2018.”
The EU document said those reforms were “sufficient for the removal of the Central American country from the EU blacklist.” The removal from the blacklist came after the recent amendment by the Belize government to its International Business Act, along with the promulgation of the Economic Substance Act.
The House of Representatives and the Senate in Belize passed these pieces of legislation within a couple of days to meet the requirements from the EU to be removed from the blacklist, which is considered a great accomplishment for Belize. Prime Minister Dean Barrow has welcomed the decision, signalling his government’s willingness to modernize the international tax framework.
A press release from the government stated that it would continue to engage with EU officials and the international business and financial services sector to address additional technical issues. While the government applauded this decision from the EU, Leader of the Opposition, John Briceño was not convinced but welcomed the notion hesitantly.
“There are still some sections that need to be corrected,” said Briceño. The amendment to the Acts in International Business and Economic Substance began on October 4th in the House of Representatives. They passed six pieces of legislation that gained the attention of the EU. The key piece of the legislation was the International Business Companies Act, which was modified to avoid any further issues with the EU. In the past, Belize was accused of maintaining laws that favoured tax evasion.
On October 9th, the Senate debated the legislation. At the end of the session, the Senators approved and passed the bills into law. The EU removed Belize from the blacklist as a tax haven a month later. Eight other countries remain blacklisted by the EU; they include Oman, Fiji, Samoa, Trinidad and Tobago, Vanuatu along with the three United States territories of American Samoa, Guam, and the U.S. Virgin Islands.
EU removes Switzerland, UAE from tax haven list
In the meantime, the European Union has announced the United Arab Emirates, the Marshall Islands and Switzerland were among nations removed from a list of countries described as tax havens. The United Arab Emirates and the Marshall Islands were removed from the blacklist, while Switzerland was among the five countries struck from the so-called “grey list.” Switzerland “delivered on its commitments” to reform its tax rules.
The European Union removed seven countries from its blacklist of tax havens, the bloc’s finance ministers said in a recent statement. The EU tax haven lists were set up in 2017 and track jurisdictions that do not cooperate with the bloc on tax matters.
“If Switzerland is off this list, it is a success for me…The best list is a short list.”– European Commissioner for Economic Affairs, Pierre Moscovici
Switzerland, one of the EU’s close trading partners, had been on the gray list. The Alpine nation has “delivered on its commitments” and can no longer be considered a tax haven, according to the EU announcement. The two different lists reflected the level of commitment countries had given to implementing change. Countries on the gray list were being monitored by the EU after promising to commit to EU tax laws.
“Albania, Costa Rica, Mauritius, Serbia and Switzerland have implemented ahead of their deadline all necessary reforms to comply with the EU tax good governance policy,” the finance ministers said. Meanwhile, countries on the blacklist had provided no such commitment to the EU. The UAE was removed completely from this list, after rushing through tax reform in September.
The list has included Switzerland since it was set up in 2017, following the international revelations about global tax scandals in the Panama Papers. The goal was to “name and shame” countries which support tax evasion by multinationals and wealthy individuals.
“If Switzerland is off this list, it is a success for me,” said Pierre Moscovici, European Commissioner for Economic Affairs. “The best list is a short list.”
However, the decision has faced criticism from monitors of global tax fraud, including Oxfam. Chiara Putaturo, Oxfam’s EU tax adviser, tweeted that the EU had “whitewashed two of the world’s most harmful tax havens.”