(CMR) BRUSSELS (Reuters) – European Union finance ministers are set to add the British overseas territory of Bermuda to the bloc's blacklist of tax havens on Tuesday.
The largest review of the list since its adoption in Dec. 2017 is expected to see the number of listed jurisdictions triple from the current five.
The Caribbean island of Barbados and the Arab Sultanate of Oman are also on the expanded draft list, EU documents show. Other jurisdictions in the Caribbean and the Pacific Ocean are set to complete the updated list.
The 28-nation EU set up the blacklist after revelations of widespread tax avoidance schemes used by corporations and wealthy individuals to lower their tax bills.
Blacklisted jurisdictions face reputational damage and stricter controls on their financial transactions with the EU, although no EU sanctions have yet been agreed by European states.
Britain had pushed other EU states not to include Bermuda on the list, but has lifted its objections after the European Commission argued that the island has “been playing games” to dodge EU requirements, according to minutes of a meeting of EU envoys on the matter.
Jurisdictions are added to the tax haven blacklist if they have shortfalls in their tax rules that could favor tax evasion in other states. They are removed from the blacklist if they commit to reforms by set deadlines.
Bermuda was required to change its tax rules by the end of February, but added new loopholes in revised legislation and did not provide a final text by the deadline, the Commission said according to the document.