05/02/21

EUROPE: MEPs call for UK to be screened against tax haven blacklist.

As published on independent.ie, Friday 5 February, 2021.

The UK should be screened “promptly” against the EU’s tax haven blacklist, MEPs say.

In an opinion on last December’s post-Brexit trade deal, the European Parliament’s economic affairs committee said it “fears the impact of differing legislation concerning corporate income taxation” in the UK.

The report, published yesterday, also calls on the UK to tell EU banking supervisors well in advance before making any financial sector rule changes.

Committee chair Irene Tinagli said yesterday that EU countries should use all the tools they have “to protect their tax revenues, taking into account the fact that the United Kingdom is now a third country”.

The EU’s current tax blacklist contains 12 countries, mainly Caribbean and Pacific islands such as the British overseas territory of Anguilla.

It lists non-EU countries that fail to comply with the bloc’s standards on tax avoidance, evasion and anti-money laundering.

EU countries are not included, though MEPs would like them to be.

Last month, the parliament named Ireland as a tax haven in a report that was voted through by a massive majority.

The Parliament had hoped to vote on the EU-UK trade deal on February 23, but that date is now in doubt due to a delay in translating the texts into the EU’s 24 official languages.

The economic committee’s opinion is one of a series of reports MEPs are preparing ahead of the parliament’s full vote. A total of 11 committees have submitted their opinions so far.

Other committees have raised concerns about the ongoing diplomatic row over the EU’s London embassy and the UK’s plans to soften its rules on working time, pesticides, and genetically modified food.

Chancellor Rishi Sunak has also suggested the UK could go for a ‘Big Bang 2.0’ on financial deregulation.

The EU has yet to declare UK financial rules ‘equivalent’ for supervisory purposes, which would allow UK-based banks to continue selling to consumers across the bloc.

As part of that equivalence decision, economic MEPs say EU supervisors should be granted “direct and enhanced supervisory powers” over UK banks in an emergency.

EU financial services chief Mairead McGuinness said the bloc will first agree a memorandum of understanding on financial services with the UK, as set out in the post-Brexit trade deal, before moving on to equivalence.