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Discussion Papers (series)

The EU list of tax havens: Progress and challenges


Pamella Eunice Ahairwe, Luckystar Miyandazi and San Bilal, ECDPM paper, November 2021

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The Pandora Papers by the International Consortium of Investigative Journalists (ICIJ) reveal how some of the global elite continue to channel wealth to offshore tax havens, avoiding taxes and also engaging in financial crimes, especially money laundering. Coupled with the growing inequalities among the richest and poorest of the world, which COVID-19 has not only laid bare but also exacerbated, this has rekindled debates on global tax governance and the need for the wealthy to pay their fair share of taxes and contribute to sustainable development. The European Union (EU) contributes towards international tax good governance through its list of non-cooperative tax jurisdictions (the EU list of tax havens). This list exposes non-EU countries that encourage abusive tax practices and whose tax systems affect the EU tax base.

This paper discusses the historical foundations, features, criteria and process of the EU list of tax havens and how it impacts the listed developing countries. It concludes that the EU list has reputational issues with negative economic consequences on developing countries, and its fairness remains questionable. It suggests that the EU should address the unintended economic consequences, enhance its cooperation and consultation with developing countries and resolve fairness issues by equitably applying tax good governance standards to EU and non-EU countries.

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Trade, investment and financeDiscussion Papers (series)Tax