EU parliamentary group wants the US blacklisted as a tax haven
In a report titled “The Role of the US as a Tax Haven – Implications for Europe,” the group argues that the US is not doing enough to address the issue of transparency in company ownership and bank account information between tax authorities.
“The EU should carefully scrutinize the US in the upcoming process of creating a common blacklist of tax havens. We should introduce a withholding tax on US banks not exchanging information as the US has done with European banks. We need the US to sign up to the highest international standards of transparency," says the report, released last Wednesday.
The Greens/European Free Alliance’s research was published ahead of a special visit to Washington by a European Parliament committee that is investigating tax avoidance.
The group notes that the US is a major financial center that holds nearly 20 percent of the global market share of financial services for non-residents. “However, its transparency legal framework is not consistent with the responsibility involved in being a major financial hub,” says the report.
Fourteen US states – including Delaware, New York and Virginia – don’t require financial institutions to identify the owners of companies and trusts, thus allowing for the creation of shell companies to hide behind, according to the report.
Commenting on the report, German Green member of European Parliament (MEP) Sven Giegold said that the US “fails to live up to standards of global reporting that it requires of others,” likening the US’s international policy on the exchange of financial information to a “one-way street.”
UK Green MEP Molly Scott Cato, who serves as the parliamentary group’s tax spokeswoman, echoed Giegold’s sentiments, saying that the US to is increasingly serving as a tax haven for the world’s wealthy elite.
“The EU should carefully scrutinise the US in the upcoming process of creating a common blacklist of tax havens. We should introduce a withholding tax on US banks not exchanging information as the US has done with European banks. We need the US to sign up to the highest international standards of transparency,” Cato said.
The European Parliament’s special committee on taxation was set to send a fact-finding delegation to Washington this week to look into the state of tax avoidance in the US.
This comes at a time when global leaders are redoubling efforts to crack down on tax evasion worldwide following last month’s release of the Panama Papers, which are 11.5 million leaked documents that detail how the wealthy keep use offshore entities to keep their financial information private.