LUXEMBOURG AND Austria have strongly criticised a decision by the OECD to place them on a “grey list” of states that do not fully comply with standards for catching tax evaders.
“I find the treatment of certain states to be incomprehensible,” said Luxembourg’s prime minister and finance minister, Jean-Claude Juncker, who described the publication of the OECD list as “fatuous” and a “rush job” at a meeting of EU finance ministers in Prague. The “grey list” was published on Thursday to coincide with the G20 summit in London alongside a “black list” of countries that refuse to cooperate in cross-border tax evasion cases.
It follows weeks of lobbying by France, Germany and the US for states to sign up to global rules allowing the automatic transfer of tax information to try to stem the loss of billions of euro in revenue to offshore tax havens.
Belgium, Luxembourg and Austria have all decided to loosen their banking secrecy regulations to allow information to be exchanged with tax authorities when specific instances of tax evasion were suspected.
But the OECD put Luxembourg, Austria and Belgium – all EU states – on the “grey list” of countries that have agreed to improve transparency standards but have not yet signed the necessary double taxation accords.
At the talks yesterday, the Czech presidency of the EU told finance ministers from the three countries it had lobbied other G20 states to delay the publication of the “grey list” this week but it had not succeeded in its request.
Mr Juncker said Luxembourg would implement the reforms it had already signed up to.
“We will negotiate double-taxation agreements. When we do that, we will disappear from this list,” he told reporters.
Austria’s finance minister, Josef Proell, said the OECD list on tax havens must be discussed further.
“As a member of the OECD, I expect to be listened to and to be able to join in the discussion and to take a joint decision,” said Mr Proell.
“We have already given information in individual cases without legal steps being taken. We do not need, because of that [the G20 declaration], to tackle banking secrecy as it exists in Austria in our banking practice law,” he added.
Diplomats said the aim of the grey list was to put pressure on countries that have just signed up to the OECD rules to implement them quickly.
French finance minister Christine Lagarde said no one could object to transparency.
“How can you be furious against a principle which consists of saying that you need transparency? That taxes are paid where they should be? The money that finances terrorism, the networks which escape thanks to obscure corners of the world, continue to finance such scandalous and uncertain causes,” she told reporters.
“If certain states refuse transparency, we need the arsenal of sanctions that is already planned and on which the finance ministers have worked and which we will submit at the next G20 in September,” Ms Lagarde said.
Sanctions could include requiring significant increases in capital requirements for EU-based financial institutions that have relations with tax centres that do not co-operate, Ms Lagarde said.
