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by pltm
(PLTM) - The BVI is among eight Caribbean countries that the European Union (EU) has given until the end of 2018, to take measures against tax evasion and tax avoidance, in order to avoid being blacklisted by the region.
The EU said the 1-year timeframe was given due to the devastation Hurricanes Irma and Maria caused these countries.
At the end of the year, the EU said it expects to get commitments from these countries on how they plan to improve their tax systems.
Countries regarded as tax havens are those said to have financial services and tax laws that make it easy for wealthy individuals and companies to hide wealth and avoid taxes.
Earlier this week, the EU adopted its first blacklist, which names 17 countries as tax havens or "non-cooperative jurisdictions for tax purposes."
It said these countries, "have taken no meaningful action to effectively address the deficiencies" in their tax systems.
The list of blacklisted countries include 4 from the Caribbean—Trinidad and Tobago, Grenada, St. Lucia and Barbados.
However, in a document about the blacklist, the EU said it has not yet assessed 8 Caribbean countries, as it holds the view that, “the screening process should be put on hold for Anguilla, Antigua and Barbuda, Bahamas, British Virgin Islands, Dominica, Saint Kitts and Nevis, Turks and Caicos Islands, US Virgin Islands."
"Nevertheless, the Code of Conduct Group should, by February 2018, pursue further contacts with these jurisdictions, with the view to resolving these concerns by the end of 2018," the EU document read.
The EU also published a second list of some 47 countries which it said have committed to changing their tax rules to meet standards it has issued. Cayman and Bermuda made this list.
The EU said countries that have given commitments will be added to the blacklist if they don't implement measures by the deadlines.
Serious punishments have not been implemented, but the EU issued a warning for it's member-states to take strong action against countries that do not make adjustments. Blacklisted countries may also be denied EU funds.
The blacklist represents a major step taken by a global body to fight tax evasion and put pressure on countries long regarded as helping the rich hide their wealth.
It comes just a month after the publication of the Paradise Papers, which like the 2015 Panama Papers, revealed how companies and wealthy individuals hid their wealth in offshore accounts to avoid paying taxes.
The BVI has long fought it's international image as a tax haven, with successive governments insisting that the Territory's laws don't facilitate tax avoidance.
The BVI and the other Caribbean countries which the EU gave time to improve, were blacklisted by the group in 2015, following the publication of the Panama Papers.
The BVI was also blacklisted by France in 2013, but was later removed by that country.
In making the blacklist, some EU country representatives suggested that strict sanctions be taken against those on the list. However, the UK was among countries that did not support harsh sanctions.
Critics have bashed the EU for targeting low-income countries of the world, and for putting no direct pressure on British Overseas Territories like the BVI and The Caymans Islands, which the international community has long-regarded as tax havens.
The 17 countries that made the blacklist:
American Samoa Bahrain Barbados Grenada Guam Panama Saint Lucia Samoa Trinidad and Tobago Tunisia United Arab Emirates South Korea Macau The Marshall Islands Mongolia Namibia Palau
