Call for Europe to widen tax haven net to include EU culprits

Oxfam activists stage a satirical street-play mimicking wealthy people hidding their money in tax haven, in this December 5, 2017 photo, near the European institutions in Brussels, within a meeting of European Union ministers over a credible blacklist of non-EU tax havens. (AFP)
Updated 13 December 2017
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Call for Europe to widen tax haven net to include EU culprits

LONDON: The EU is coming under mounting pressure to include countries within the bloc in its global crackdown on tax havens.
In the European Parliament, the Socialists and Democrats group has tabled an amendment demanding that Luxembourg, the Netherlands, Ireland and Malta — all EU members — should be written into the EU tax haven list.
Richard Murphy of Tax Research told Arab News: “There is plenty of evidence to suggest there are companies in those countries that have no economic substance and are established for tax purposes only.”
He added: “If we want to fight tax avoidance credibly on a global stage, we must also put our own house in order. Why should we care less about states inside of our union that have turned stealing our taxes into their business model?” The UAE, Bahrain and Tunisia were among 17 countries named as facing sanctions following the EU probe. But critics have said the list is undermined by being too selective and turning a blind eye to a number of other countries that should also have been penalized.
The UAE issued a strongly-worded statement saying it was surprised to be included in the list and had “worked transparently with European Union counterparts to ensure that we meet the criteria laid down by European Union Member States.”
Peter Simon, on behalf of the Socialists and Democrats group in the European Parliament, said according to the most recent OECD data on foreign direct investment, Luxembourg and the Netherlands together have more inward investment than the US, “and that the vast majority of these investments are in special-purpose entities with no substantial economic activity.”
He pointed out that of all the corporate investments ending up in tax havens, a total of 23 percent passed through the Netherlands, according to research by the University of Amsterdam.
Simon said the data provided clear indication that EU member states were “facilitating excessive profit-shifting activities, which comes at the expense of other European member states.”
“We therefore call on the European Commission to regard Luxembourg, the Netherlands, Ireland and Malta as EU tax havens.”
Murphy said: “I support the call. These places all deserve that status in their own right and it is good to see there are some politicians who are willing to stand up and say so.”
The EU’s original blacklist of tax havens —  which included South Korea, St. Lucia and Barbados — was published on Dec. 5, 2017.
It also put 47 countries on a so-called “grey list” as they had promised to change their tax rules to meet EU standards; these included Hong Kong, Jersey, Bermuda and the Cayman Islands, as well as Switzerland and Turkey.


Turkey cuts investment criteria for foreigners seeking citizenship

Updated 40 min 36 sec ago
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Turkey cuts investment criteria for foreigners seeking citizenship

  • Turkey made it easier for foreigners to become Turkish citizens by cutting the financial and investment criteria required for citizenship
  • Foreigners now need only to have $500,000 deposits in Turkish banks

ANKARA: Turkey on Wednesday made it easier for foreigners to become Turkish citizens by cutting the financial and investment criteria required for citizenship, according to a decree from President Recep Tayyip Erdogan.
Foreigners now need only to have $500,000 deposits in Turkish banks, down from $3 million before while fixed capital investment was reduced from $2 million to $500,000 dollars, the decree published in the Official Gazette said.
Meanwhile individuals can obtain citizenship if they employ 50 people, down from the previous 100, while those who own property worth $250,000 can become Turkish citizens, compared to the previous value necessary of $1 million.
The decree is the latest in a series by Erdogan in what appears to be a bid to prop up the embattled Turkish lira and the economy which slowed down in the second quarter.
Last week, the president ordered that contracts for the sale, rent and leasing of property in or indexed to foreign currencies would not be allowed.
The Turkish currency fell against the US dollar drastically in August after one of the most bitter spats between Ankara and Washington over the detention of an American pastor.
The lira lost nearly a quarter in value against the greenback in August.
But there had been investor concerns over domestic economic policy and Erdogan’s continued opposition to high interest rates, although the central bank aggressively hiked its main policy rate 6.25 percent to 24 percent last week.
Erdogan will later meet with representatives of American companies working in Turkey at 1500 GMT at his presidential palace in Ankara, according to the presidential website.
He will meet with 30 senior executives, according to HaberTurk daily, including representatives from Microsoft and Google.