New Sanctions under consideration by the EU
New Sanctions for Tax Havens under consideration: Introduction: In 2016 the European Council took the decision that an EU list of non-cooperative jurisdictions should be prepared in 2017. Moreover the evaluation process which is intended to be regular and continuous process, for third countries is set to be completed by the end of September so that the full list is completed by the end of the year.
New Sanctions for Tax Havens under consideration
According to reports, new kinds of sanctions are under EU’s consideration for jurisdictions included in the aforementioned list. More precisely and in accordance with various sources, EU is considering four kinds of sanctions non-cooperative jurisdictions. These are the following:
- Withholding taxes
- New controlled foreign company rules
- Elimination of deductible costs such as royalties
- Participation exemption limitations
Moreover, the EU is thinking of implementing a new scheme allowing member states to apply different sanctions against the same jurisdiction in accordance with EU member states’ national tax legislation based also on specific circumstances.
Sanctions Application approaches
According to information, there are three approaches in applying the said sanctions by member states as follows:
- flexible approach
- rigid approach
- “toolbox” approach.
Flexible approach apparently shall give the member states the flexibility to choose from a list of options as to the sanctions to be imposed.The second approach however is rather more specific with a short list of countermeasures which is suitable and applicable for all jurisdictions listed in the list. The final approach involves the evolvement of very specific, custom made countermeasures that would be dealing with more specific issues.This approach would enable member states to develop new toolboxes according to the needs of member states.According to sources, approximately 100 jurisdictions are currently been screened for the purposes mentioned above.
The said list is to be completed by the end of the year.
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