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EU to add Russia, 3 others to list of tax havens -draft document

European Union finance ministers will add Russia, Costa Rica, British Virgin Islands and Marshall Islands to the EU list of tax havens on Tuesday, a draft document showed.

The EU takes into account who is on its list of non-cooperative jurisdictions for tax purposes in its foreign policy decisions when considering development cooperation and other economic relations with third countries.

“The Russian Federation has a harmful preferential tax regime (International Holding Companies) and has not resolved this issue,” the draft conclusions prepared for the EU finance ministers’ meeting said.

“Marshall Islands facilitates offshore structures and arrangements aimed at attracting profits without real economic substance by failing to take all necessary actions to ensure the effective implementation of substance requirements,” they said.

“Costa Rica has a harmful foreign source income exemption regime, and has not resolved this issue yet,” they said.

The EU list, set up in 2017 after revelations of widespread tax evasion and avoidance schemes, now includes 16 countries: American Samoa, Anguilla, the Bahamas, British Virgin Islands, Costa Rica, Fiji, Guam, Marshall Islands, Palau, Panama, Russian Federation, Samoa, Trinidad and Tobago, Turk and Caicos Islands, the U.S. Virgin Islands and Vanuatu.

Those on the blacklist face reputational damages, higher scrutiny in their financial transactions and risk losing EU funds.
Source: Reuters (Reporting by Huw Jones in London; Writing by Jan Strupczewski; Editing by Andrea Ricci)

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