An OECD (Organisation for Economic Development and Cooperation) group met last week in Paris and has drawn up an initial list tax havens.
The OECD, which consists of 28 major industrial countries, has been 'in the process of identifying jurisdictions which function as tax havens.'
It says it is 'taking steps to eliminate the adverse consequences which those jurisdictions have on the world economy.'
According to the OECD, those jurisdictions identified as tax havens will be 'encouraged to eliminate the harmful features of their regimes as part of an ongoing co-operative dialogue with the OECD Forum on Harmful Tax Practices'
It warns however that: 'In situations in which those discussions are unsuccessful, co-ordinated countermeasures by OECD member countries are foreseen.'
A draft blacklist of tax regimes deemed to be 'harmful' will be presented to the Committee on Fiscal Affairs, the OECD?s senior tax policy body, at a meeting in January. A more final list would be submitted to the OECD Council in June.
Its campaign against harmful tax regimes, many of which are in small autonomous territories or on small islands, has been characterised by those potentially targetted as big countries trying to bully smaller jurisdictions into submission.
The OECD describes tax havens as follows:
A tax haven is a jurisdiction that
(i) imposes no or only nominal taxes (generally or in special circumstances) and
(ii) offers itself, or is perceived to offer itself, as a place to be used by non-residents to escape taxation in their country of residence and
(iii) possess confirming criteria.
Those confirming criteria are: 1) lack of effective exchange of information; (2) lack of transparency; and (3)attracting business with no substantial activities.
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