American Samoa is on EU’s blacklist of “non-cooperative” tax jurisdictions

fili@samoanews.com

American Samoa is among the 17 countries and territories now listed on the European Union’s “blacklist” of “non-cooperative tax jurisdiction,” according to the EU’s list publicly released yesterday — which also includes neighboring Samoa and Guam.

“The adoption of the first ever EU blacklist of tax havens marks a key victory for transparency and fairness,” said Pierre Moscovici, EU’s Commissioner for Economic and Financial Affairs, Taxation and Customs, in a news release from the group’s headquarters is Brussels, Germany.

“We must intensify the pressure on listed countries to change their ways,” Moscovici said. “Blacklisted jurisdictions must face consequences in the form of dissuasive sanctions, while those that have made commitments must follow up on them quickly and credibly.”

As to why American Samoa is listed, a 38-page “Outcome of Proceedings” document from the General Secretariat of the Council of the European Union, which was made public yesterday, only provided a summary explanation. It says American Samoa:

•     Does not apply any automatic exchange of financial information,

•     Has not signed and ratified, including through the jurisdiction they are dependent on, the OECD (Organization for Economic Co-operation and Development) Multilateral Convention on Mutual Administrative Assistance in Tax Matters as amended,

•     Does not apply the BEPS (Base Erosion and Profit Shifting) minimum standards, and

•     Did not commit to addressing these issues by 31 December 2018.

An identical summary explanation is also given to Guam. For Samoa, it says the independent state, “has harmful preferential tax regimes, does not apply the BEPS minimum standards and did not commit to addressing these issues by 31 December 2018.”

EU public documents, available on its website and reviewed by Samoa News, didn’t specify whom in American Samoa was contacted to obtain information on this matter.

Samoa News reached out yesterday morning to the Governor’s Office and a senior official with the ASG Treasury Department for comments or information on who to contact to respond to questions. But there was no immediate reply as of press time.

All 17 blacklisted countries are each given only a summary of the reasons for being considered a “non-cooperative tax jurisdiction”.

This is the first time the EU has produced a “blacklist”, saying the list is part of EU’s work to clamp down on tax evasion and avoidance.

Additionally, it says, it will help the EU deal more robustly with external threats to Member States' tax bases and tackle third countries that consistently refuse to play fair on tax matters.

Establishment of the list was approved last November and had to be in place before the end of 2017, according to the EU news release, which also states that the list was established following a screening and a dialogue conducted during 2017 with a large number of third country jurisdictions.

In October this year, letters were sent to all jurisdictions concerned, informing them of the outcome of the work. Most jurisdictions chose to engage with the EU process through a constructive dialogue, and to take steps towards resolving issues identified.

“The jurisdictions that appear on the list are strongly encouraged to make the changes requested of them,” said the EU.

BACKGROUND

The OECD Multilateral Convention on Mutual Administrative Assistance is the most comprehensive multilateral instrument available for all forms of tax co-operation to tackle tax evasion and avoidance, a top priority for all countries.

BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity. Although some of the schemes used are illegal, most are not.

Complete details and other information can be found at <www.oecd.org>

Comment Here