(MENAFN - AFP) EU finance ministers sought Tuesday to break resistance against creating Europe's first ever blacklist of tax havens after new revelations from the "Paradise Papers" showed how major firms escape tax.
The 28 members of the European Union have struggled for over a year to finalise a list of non-EU tax havens, with smaller countries such as Ireland, Malta and Luxembourg loath to scare off major firms headquartered in their low tax capitals.
Soon-to-quit Britain has also drawn up resistance, hoping to protect the near zero-tax rates offered in several of its dependencies, such as Jersey or the British Virgin Islands, that have been identified in the series of leaks that also include Panama Papers and the Luxleaks scandal.
The island of Jersey, a few kilometres (miles) off the coast of France, was where the latest reports said Apple shifted much of its offshore wealth when Ireland changed its laws under pressure from the EU.
"It is important that this list comes out (...) in 2017, it must be credible and up to the challenge," said EU Economics Affairs Commissioner Pierre Moscovici, who is leading the blacklist effort.
The EU ministers will try to bridge their differences and draw up an official list of unwanted tax havens in December, whittling down an initial list of 92 countries finalised last year.
Sources said EU officials have warned about 60 countries that their tax policies may be problematic and at risk of blacklisting, demanding further information before a November 18 deadline.
- 'Must be sanctioned' -
EU members have especially struggled to finalise the criteria or consequences for landing on the blacklist, with France's Bruno Le Maire saying he would propose that countries included should be denied funding from the IMF and World Bank.
"Countries that do not respect their commitments in terms of information shared must be sanctioned," said Le Maire, who is also leading an effort to increase tax in Europe on US tech giants such as Google and Apple.
The latest Apple revelations emerged as part of the Paradise Papers released late Sunday by the US-based International Consortium of Investigative Journalists (ICIJ), which was behind the similar Panama Papers made public last year.
The Panama leak pressed the EU in 2016 to draw up the Europe-wide blacklist that would replace a series of national ones that all too often fell short of catching out tax dodgers.
Much as with the Panama Papers report and LuxLeaks, the latest documents also expose the secret ways the rich and multinationals, with the help of accountancy firms, shift profits across the globe to drastically cut tax.
The LuxLeaks scandal was particularly embarrassing for the EU as it revealed in 2014 that Luxembourg gave companies huge tax breaks while European Commission President Jean-Claude Juncker was prime minister.
While perfectly legal, these methods are increasingly seen as unethical, as they help divert billions in profit from the tax man and hard up public coffers.