Austria, Belgium, and Luxembourg have voiced their displeasure at being placed on the OECD’s ‘grey list’ of countries that are not yet compliant with OECD tax cooperation rules.
The OECD has published three lists of countries that are not yet fully in sync with its rules. The first ‘black list’ names countries that have not yet made any progress towards bringing their rules in line with OECD standards.
Switzerland, Liechtenstein and the three EU countries find themselves on a second ‘grey list’, which names 38 territories that have committed to OECD standards but have yet to fully implement the required changes.
China is on a ‘white list’ of countries that have substantially implemented the tax rules. China has been placed on the list for its slow progress on implementing the rules in the Chinese-controlled regions of Hong Kong and Macau.
Jean-Claude Juncker, Luxembourg’s prime minister and finance minister, reacted angrily to his country’s inclusion on the list, describing the OECD document as a “rush job”. At a meeting of EU finance ministers in Prague, he said that he found “the treatment of certain states to be incomprehensible”.
The Luxembourg PM added that his country would “disappear from the list” after it had concluded “double-taxation agreements”.
Belgian Finance Minister Didier Reynders also conveyed his disappointment over his country’s inclusion. It was not “very pleasant to be on a list that also included tax havens,” he said. He added that Belgium also intended to be swiftly removed from the list once it had signed cooperation agreements with 12 countries.
His Austrian counterpart Josef Proell suggested that planned changes in banking rules would “not disturb [his] country’s banking secrecy”. The minister said Austria would improve information exchange with other countries in cases where there was suspicion of wrongdoing.
Switzerland has reacted strongly to the publication of the OECD list. Swiss Finance Minister Hans-Rudolf Merz reiterated that “Switzerland is not a tax haven”. In a statement, he said Switzerland “always meets its obligations and is always ready to engage in dialogue”. He was disappointed that despite being a founding member of the OECD, Switzerland had never been included in the discussions on drawing up the lists, an omission which he found “particularly strange”.
Criticism and action
However, other EU countries not included on the list did not share the anger of their EU partners. French Finance Minister Christine Lagarde dismissed Juncker’s frustration, suggesting that it was incomprehensible for Luxembourg’s leader to be opposed to transparency and taxes. “One can’t be against this,” she said.
The French minister suggested that there was a need for “possible sanctions against financial companies that continue to do business with non-cooperative centres”. While underlining that sanctions should not affect the flow of credit to businesses, she said they may include “increasing the capital requirements” of such companies.