Turkey may be labeled as illegal tax haven by EU

Turkey may be labeled as illegal tax haven by EU
The European Union is considering adding Turkey to a blacklist of tax havens as early as next month, Bloomberg reports. This is likely to further strain relations between Brussels and Ankara, and rule out Turkey's EU membership.

The media reports, quoting its sources, an EU working group concluded that Turkey’s commitments to address transparency issues and tackling tax havens are so far “not sufficient,” Non-compliant countries are expected to be blacklisted by December 5.

While at the moment inclusion in the list of illegal tax havens brings no financial sanctions, the move is likely to damage relations between Turkey and the EU. France is pushing for the exclusion of such countries from international funding.

Germany has been using its influence to limit Turkey's financing from the state bank KfW, the European Investment Bank and the European Bank for Reconstruction and Development. German commercial banks are also considering their attitude toward Turkey, officials familiar with this issue told Bloomberg last month. Chancellor Angela Merkel said the EU could cut Turkey's funding in response to the country's crackdown on democratic institutions.

Serbia, Armenia, the Cook Islands, the Marshall Islands, Panama, and Tunisia are among 36 countries that could be included in the blacklist. A total of 92 jurisdictions are being monitored.

Seven Caribbean jurisdictions damaged by the recent hurricanes have been given the benefit of the doubt. At the same times, UK territories including Guernsey, the Isle of Man, and Jersey are considered legal and excluded from the blacklist.