The UK will never be granted a free trade agreement with the European Union if it seeks to take advantage of Brexit by setting itself up as an offshore tax haven for businesses and the wealthy, the EU economic affairs commissioner has warned.
Pierre Moscovici also warned that UK tax jurisdictions such as Jersey could find themselves moved from an EU grey list to its black list if they fail to comply with EU standards on exchanging tax information. The black list was set up earlier this month, and Moscovici is still urging the EU to set out clear sanctions to enforce compliance.
“We will check and if their commitments are not serious they will be put on the black list in six months,” he said. “Thereafter we will change the list once a year.”
He warned the UK not to think that outside the EU it could set itself up as a tax haven. Referring to OECD-led agreements on tax information exchange known as base erosion profit shifting (BEPS), he said “When we negotiate a free trade agreement I think we can, and we should, involve in the negotiation the need to fulfil the international global standards agreements. We should not conclude any kind of free trade agreement that is not BEPS-compatible”.
BEPS is a broad initiative largely driven through the G20 to force countries to fill tax loopholes that allow multinationals to shift profits to minimise tax