EU sets end of May deadline for Turkey to avoid blacklist

Turkish President Recep Tayyip Erdogan in Istanbul, Turkey, on 16 October 2020. [EPA-EFE/TOLGA BOZOGLU]

The European Union decided not to include Turkey in its blacklist on Monday (15 February) after the Turkish authorities made some commitments to facilitate the exchange of information on tax matters.

EU countries have been discussing over the past days an update to the bloc’s list of non-cooperative jurisdictions on tax issues.

National experts reached an agreement on Monday not to include Turkey, while Dominica was added to the EU blacklist and Barbados was removed.

Ankara will remain on the EU’s ‘grey list’ of countries that must adopt a series of reforms on tax matters by a set deadline. 

An EU official told EURACTIV that Ankara was asked “to commit at a high political level by the end of May” to activate the automatic exchange of information with member states on tax matters.

Turkey already failed to adopt these changes by the end of last year, as demanded by the EU to avoid its inclusion.

The approval of the updated blacklist was initially planned for the Ecofin Council of EU27 economy and finance ministers on Tuesday. But the issue was excluded from the agenda at the last minute. 

Instead, the updated list will be included as a non-discussion topic in the EU ambassadors’ meeting (COREPER) on Wednesday and formally adopted by the Foreign Affairs Council on 22 February, where ministers are expected to meet in person. 

Portugal’s Minister of State and Finance, João LEÃO, whose country is currently chairing the EU Council, confirmed after Tuesday’s Ecofin Council that Turkey was not included in the blacklist.

“We were able to make progress in terms of cooperation with Turkey in tax matters,” he said.

EU to give Turkey more time to avoid tax blacklisting

European Union diplomats have reached a preliminary agreement to give Turkey more time to meet tax transparency requirements, two diplomatic sources said, in a move that could weaken the bloc’s blacklist but at the same time avoid a new clash …

The new deadline came as a compromise to bridge divisions among the 27 governments as the EU and Turkey are trying to ease the tensions,  recently worsened by Ankara’s gas exploration in the eastern Mediterranean.

EU member states including France, Greece, Cyprus and Austria opposed giving Turkey additional time to cooperate on tax matters, EU diplomats said. But Germany pushed back against its inclusion, as Berlin is trying to improve the bilateral relationship to maintain Ankara’s cooperation on migration and other dossiers. 

The EU created in 2017 a blacklist of uncooperative jurisdictions and countries that encourage abusive tax practices. The updated version will comprise American Samoa, Angilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the US Virgin Islands, and Vanuatu and Seychelles.

[Edited by Zoran Radosavljevic]

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