28 September 2016

UK overseas territories could be affected by EU tax crackdown

Jersey, British Virgin Islands and Cayman Islands among possible targets for economic sanctions after being included on low corporation tax scorecard

A view of the Cayman Islands. The EU is planning to publish a definitive list of tax havens. Photograph: David Doubilet/National Geographic/Getty Images


Eight British overseas territories and crown dependencies, including Jersey, the British Virgin Islands and Cayman Islands, could face EU economic sanctions after Brussels identified them as having low or no corporation tax.

Experts have published a scorecard showing red flag warnings set against a list of the 81 countries that may attract companies or individuals seeking to avoid or evade European taxes. 

The scorecard will be discussed among member states before a shortlist of countries is selected for further screening and whittled down to a definitive EU list of tax and secrecy havens, to be published at the end of next year. 

In the meantime, discussions are under way as to sanctions that the EU could impose on countries included in the final list. Options being discussed include the introduction of additional taxes, known as “withholding taxes”, or the removal of tax deductions.


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