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Thursday, September 21, 2023

European parliament agrees to add British overseas territories to post-Brexit tax haven blacklist

MEPs have voted to add British overseas territories such as the British Virgin Islands, Guernsey, and Jersey to its post-Brexit tax havens blacklist.

The resolution passed through the European parliament with a majority of 537 and saw territories with 0% tax regimes automatically added to the list.

Britain’s membership of the European Union had afforded it some protection, and allowed it to protect its overseas territories from scrutiny.

The text of the vote explicitly mentioned the Brexit deal – suggesting that the UK’s departure from the EU was based on “mutual values and geared towards common prosperity, which automatically excludes aggressive tax competition”.

Robert Palmer, the director of the Tax Justice UK campaign group, told the Guardian: “Post-Brexit the UK tax havens have lost their protector within the corridors of Brussels. I’d expect to see the EU ramp up pressure on places like Jersey to clean up their act.

“The UK itself has been warned that if the government tries a Singapore-on-Thames approach, with a bonfire of regulations and taxes, then the EU will act swiftly.”

MEPs sought to send a strong signal that tougher measures were required in response to the coronavirus pandemic.

Several jurisdictions have been taken on and off the list since it was first launched in 2017. However, those linked to EU member states have typically avoided inclusion, and the UK had lobbied to protect its overseas territories from past scrutiny

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