Policy and Advocacy

EU blacklisting criteria puts Ireland’s tax haven status beyond doubt

·         More royalties sent out of Ireland than rest of EU combined, equivalent to 26% of GDP in 2015

·         New Oxfam report urges EU to tackle tax avoidance within member states

Tuesday, 28th November 2017

A new report published by Oxfam today has identified Ireland as one of four EU countries which would be blacklisted1 as a tax haven if the EU were to apply its own criteria to member states.

The EU is currently drafting a blacklist for tax havens, analysing 92 non–EU countries and jurisdictions against a set of three criteria, which include tax transparency and policies that facilitate large-scale profit shifting. However, this process excludes EU member states, meaning that they will not be assessed.

For the first time, Oxfam has applied the EU’s own criteria to 92 countries worldwide as well as to the 28 EU member states. According to the analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist.

Furthermore, four EU member states: Ireland, Luxembourg, the Netherlands and Malta also met the criteria for being listed as a tax haven.

Ireland fails to meet the second criterion on fair taxation and the facilitation of tax avoidance. For example, the report establishes that royalties sent out of Ireland were equivalent to 26% of the country’s gross domestic product in 2015. That is more royalties than are sent out of the rest of the EU combined, and makes Ireland the world’s number one royalties provider2.

Jim Clarken, Oxfam Ireland Chief Executive, said: “As Ireland fails the EU’s blacklisting criteria, it is clear that the Government has questions to answer with regard to its stated commitment to tackling tax avoidance. In the past, the case has been made that because Ireland’s tax arrangements fulfilled OECD standards there was no substantiation that Ireland matched the conditions associated with tax haven status. The OECD’s blacklisting process has been called into question due to the fact that it only listed one country Trinidad and Tobago as a tax haven.

“The analysis in this report uses the very measurements the EU is currently applying to 92 non-EU states to assess whether they should be blacklisted as tax havens. Sadly, this analysis places Ireland in an elite club with four other EU countries; Malta, Luxembourg and the Netherlands.”

The report, Blacklist or Whitewash: What a real EU blacklist of tax havens should look like, shows how financial flows are often completely out of proportion with the tax havens’ real economic activity. In the British Virgin Islands, foreign direct investment amounts to 90,000% of the country’s GDP. For the Cayman Islands, it represents 5,400% of the GDP, for Malta 650% and for Luxembourg approximately 400%.

Oxfam is concerned that, regardless of these clear findings, EU governments will come up with a weak or even empty blacklist. The blacklist is being drafted in secret, which makes public scrutiny impossible. The Maltese EU presidency has publicly advocated for an empty blacklist. Also, following a meeting with EU finance ministers, the Swiss government has openly declared it does not expect the country to be blacklisted.

Oxfam is also urging the EU to put rules in place to reform the tax systems of EU countries like Ireland, Luxembourg, the Netherlands and Malta which meet the EU’s criteria for being listed as a tax haven.

Mr Clarken continued: “An ambitious and objective list of tax havens with strong countermeasures is a concrete and powerful way to clamp down on tax avoidance which deprives countries of hundreds of billions of dollars, fueling poverty and inequality. If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

ENDS

CONTACT: For more information or interviews, please contact Alice Dawson, Oxfam Ireland, on +353 (0) 83 198 1869 or at alice.dawson@oxfamireland.org

1.     Blacklist: Establish a “blacklist” of countries that refuse to adhere to international taxation rules. Listed countries should face stiff penalties.

Oxfam applied the EU’s own criteria to the 92 countries screened by the EU, and the 28 EU member states. According to Oxfam’s analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist: Albania, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Bermuda, Bosnia and Herzegovina, British Virgin Islands, Cook Islands, Cayman Islands, Curaçao, Faroe Islands, Former Yugoslav Republic of Macedonia, Gibraltar, Greenland, Guam, Hong Kong, Jersey, Marshall Islands, Mauritius, Montenegro, Nauru, New Caledonia, Niue, Oman, Palau, Serbia, Singapore, Switzerland, Taiwan, Trinidad and Tobago, United Arab Emirates, US Virgin Islands, Vanuatu. And four EU member states, Ireland, Luxembourg, the Netherlands and Malta

2.     Passive income such as royalties for Intellectual Property (IP), which companies are known to use to avoid tax. High levels of these payments far above normal economic activity indicates that the jurisdiction is facilitating tax avoidance.

Notes to editors:

·          Read the full Oxfam report: https://oxfam.box.com/v/EUBlacklistReport

·          An interactive map shows the 39 countries listed in the report and explains why they fail to meet the EU’s blacklisting criteria: https://public.tableau.com/profile/oxfam.eu.office#!/vizhome/ShadowEUtaxhavenblacklist_0/ShadowEUtaxhavenblacklist-map

·          The EU committed to a blacklist process in the wake of scandals like the Panama Papers and Lux Leaks that showed how tax havens let the super-rich get away with billions in unpaid taxes. EU finance ministers are expected to publish the EU blacklist on 5 December at their meeting in Brussels.

·          The EU’s listing process uses three sets of criteria to identify tax havens: transparency, fair taxation, and participation in international fora on tax.

·          The EU’s blacklisting negotiations have taken place behind closed doors and countries participating in the talks have refused to answer questions. The process has been in the hands of one of Brussels’ most secretive working bodies, the so-called Code of Conduct Group, which insists on its work being confidential.

·          Last June the OECD released its own backlist, but the result was farcical and ended up naming only one country, Trinidad and Tobago.

·          Tax dodging costs developing countries $170 billion a year: $70 billion through tax dodging by super-rich individuals and $100 billion through corporate tax dodging. $100 billion is enough money to provide an education for 124 million children and prevent the deaths of almost eight million mothers, babies and children a year.

·          Switzerland, which fails the EU’s criteria on fair taxation according to Oxfam’s analysis, has already declared they expect not to appear on the EU blacklist. This illustrates the risk that major tax havens might escape blacklisting due to political and economic pressure.

·          Following the Paradise Papers, Oxfam released a 5-point plan outlining steps governments should take to prevent further scandals on a global scale. This includes establishing a global blacklist of tax havens that naming countries such as Ireland and the Netherlands that have been key players in the Paradise Papers scandal. 

Cabinet’s plan for refugee reunifications welcome but inclusive scheme needed

Proposals brought to cabinet today to make 530 places available to allow refugees to apply to be reunited with family members living in Ireland are a positive development. 
 
However, according to Oxfam Ireland, a system for family reunification which puts the rights of refugee families on a statutory footing and which expands the current definition of the family is urgently needed. 
 
Last week in Seanad Éireann the Family Reunification Bill passed Committee stage despite Government opposition, with cross-party support from Fianna Fáil, Sinn Féin, Labour and Independents. The Bill seeks to undo the unintended consequences of the International Protection Act 2015 which narrowed the definition of the family for refugees to include only a spouse and children under 18. 
 
This has had a devastating impact on the lives of refugees settled in Ireland. It has separated children aged 18 and over from their parents, divided siblings and destroyed the bonds between grandparents and grandchildren. 
 
Under the 2015 Irish Refugee Protection Programme, Ireland committed to accept 4,000 refugees by the end of 2017. However, currently, less than half of this number have arrived. 
 
Oxfam Ireland said today; “We welcome the proposals by the Minster for Justice. Any development which enables refugees already settled in Ireland to be reunited with their family members is a positive one. There are too many people in Ireland who are currently separated from parents or older children. They long to be have them join them, to be able to provide for them and to live together in safety and dignity, but they haven’t even been able to apply to do this. 
 
The best way for the government to meet its international obligations and demonstrate Ireland’s commitment to those fleeing war and persecution is to drop its obstruction of the Family Reunification Bill. This legislation simply seeks to restore the definition of family which stood from 1996 – 2015, which is more in tune with an Irish understanding of the innate value of the family. Any discretionary scheme which enhances family reunion, but which restricts the numbers of people eligible and their countries of origin should be a complementary mechanism only. It does not duplicate or replace the provisions sought through the Family Reunification Bill. 
 
It is important to note that the bill is not pushing for anything radical or new. It is simply seeking a return to the family reunification system that operated in this country for the past 20 years, and the numbers of people granted reunification in Ireland are low – last year it was approximately 400.” 
 
The Bill was introduced by the Seanad Civil Engagement Group; Senators Colette Kelleher, Frances Black, Alice-Mary Higgins, Lynn Ruane, Grace O'Sullivan and John Dolan, who worked with Oxfam Ireland, Nasc and the Irish Refugee Council on the new legislation. 
 
Worldwide, 65 million people are on the move, trying to escape conflict, persecution and disaster. This is the highest number ever recorded in human history. 
 
ENDS
 

Family reunification bill advances through Seanad despite Government attempts to derail

8 November 2017
 
The Government today attempted to derail the passage of a bill aimed at enabling refugees living in Ireland to be reunited with family members. Following a vote, the bill passed committee stage in the Seanad despite the government voting against it.
 
However, although having majority backing from across the political spectrum, Minister David Stanton, speaking against the bill, indicated that Government are planning to block further progress when it reaches the Dáil via invoking a controversial, little-known technical power which denies a “money message”1 for the Bill.
 
The Family Reunification Bill seeks to undo the unintended consequences of the International Protection Act 2015 which narrowed the definition of the family for refugees to include only a spouse and children under 18. 
 
This has had a devastating impact on the lives of refugees settled in Ireland. It has separated children aged 18 and over from their parents, divided siblings and destroyed extended family networks. 
 
The Bill was introduced by the Seanad Civil Engagement Group; Senators Colette Kelleher, Frances Black, Alice-Mary Higgins, Lynn Ruane, Grace O'Sullivan and John Dolan, who worked with Oxfam Ireland, Nasc and the Irish Refugee Council on the new legislation. 
 
Senator Colette Kelleher said; 
“We were happy to win the vote in the Seanad today however the government’s stated intention to use an obscure technicality to block the Bill’s passage in the Dáil is a devastating blow to those refugees who have already been recognised and settled in Ireland. This Bill would make it more straightforward for siblings over 18 and other immediate family dependents to apply to join those already granted asylum in Ireland.
 
This legislation simply seeks to restore the definition of family which stood from 1996 - 2015 and one which is more in tune with an Irish understanding of a wider, more inclusive one.
 
I know of refugee families in Ireland who are separated from their parents or older children. They long to have them join them in Ireland but haven’t been allowed due to the existing legislation. Sadly, the government isn't listening and has decided to thwart our attempts to change this. We plan to continue to advocate on behalf of refugees and push to change the law to make it simpler for family members to join their loved ones.”
 
Senator Alice-Mary Higgins said; 
“The small number of refugees settled in Ireland have often fled traumatic situations and endured distressing journeys to arrive here. Anyone starting a new life in a different country needs support and integration and the best way to do this is with your family beside you.
 
It is disappointing that rather than address this Bill on its merits, the government are planning to block its future progress via the controversial and rarely-used denial of a money message. This is not in the true spirit of democracy and could be seen as showing a disregard for the legislative process.
 
Ireland was co-chair the 2016 UN Summit for Refugees and Migrants and should be showing global leadership rather than indulging in evasions and excuses which damage people's lives. We urge the government to reconsider their position and face up to their moral responsibilities on family reunification."
 
ENDS
 
Daniel English 
Oxfam Ireland
086 3544954 
 
1. Money message: In order for Private Members’ Bills which are deemed by the Ceann Comhairle to involve a charge on the State to progress to committee stage in the Dáil, they need a ‘money message’ from the government. Historically, this mechanism has rarely been used. However, the denial of a money message has recently been used to block a number of opposition Bills from reaching Committee stage in the Dáil.
 

Latest Paradise Papers scandal reveal that “Ireland tied itself in knots hoping to retain Apple”

Minister Donohoe must support moves on tax haven “blacklisting” at tomorrow’s EU meeting

Responding to the latest Paradise Papers revelations which contain startling information about multi-national companies such as Nike and Glencore and which highlight Ireland’s relationship with Apple, Jim Clarken, Oxfam Ireland, CEO said;

“The latest leaks show the lengths to which major multi-nationals have gone to avoid tax. Tellingly, they claim that “Ireland tied itself in knots hoping to retain Apple”. This is unedifying, damages our international reputation and deprives governments of vast sums in tax revenue.

Tomorrow in Brussels, EU finance ministers will discuss setting up a blacklist of tax havens. Blacklisting is one measure which can be effective for tackling tax avoidance, so Minister Donohoe needs to express Ireland’s unequivocal support for the move."

Corporations such as Apple, Nike and Glencore spend millions lobbying governments to water down tax reforms. The 50 biggest US companies, including Apple, spent an estimated $352 million lobbying on tax issues in the country between 2009 and 2015 while receiving over $423 billion in tax breaks. For every $1 they spent lobbying on tax issues they received an estimated $1200 in tax breaks

Time for Irish Government to back tax transparency reforms

6 November 2017 
 
Ireland needs to get on board with proposed EU reforms which would tackle the type of scandalous activity revealed in the Paradise Papers, Oxfam Ireland has said today. 
 
Information released in the papers has shed new light on the role played by Irish banks that allowed some of the world’s most profitable corporations significantly reduce their tax bills. Further details of Ireland’s involvement are also scheduled to be released. 
Oxfam Ireland, CEO Jim Clarken said; “I wish I could say that I was surprised by the detail contained in the Paradise Papers and Ireland’s suggested involvement.  However, we’ve been here before with the Panama Papers and other leaks. Nevertheless, we can’t just shrug our shoulders and accept this as a part of international commerce.
 
Tangible options are now available to put a stop to this murky world where corporations and the super-rich cheat governments out of billions in revenue. 
 
Ireland now has the opportunity to show leadership by supporting EU proposals aimed at fighting this type of tax evasion. This is especially important considering that our own country’s tax arrangements have been implicated as facilitating some of these nefarious practices. So now is the opportune time for the Irish Government to show their support for these reforms.” 
 
Specifically, the Irish Government now needs to support:
 
Public Country by country reporting: This requires large multinational companies to disclose where they generate profits.  This means that companies would have to pay taxes in the country where the profits are made. Currently, they declare profits in offshore havens where in reality, the company has little or no activity and pay miniscule tax. 
 
Establish a “blacklist” of non-tax compliant countries: Compile a list of those nations which refuse to adhere to international tax rules. Listed countries should face stiff penalties. Currently Trinidad and Tobago is the only blacklisted country in the world which is not credible. 
 
Jim Clarken said; “At the core of these reforms is transparency. These is no legitimate reason for big corporations to hide their tax affairs. The only reason multi-national companies use these offshore funds is to allow them avoid paying their fair share of tax. Tax that could be used in Ireland and in poorer nations to help fund health, education and other social services. 
 
The Irish government must show commitment to playing its part in tackling this global scandal by supporting reform measures at EU level. In the past, the Irish Government claims that it fulfils international standards in tax transparency as set out by the OECD. However, under these transparency standards the tax information of multinational companies remains secret.  
 
These so-called ‘transparency measures’ haven’t prevented the abuses we are seeing in the Paradise Papers. It is obvious that public reporting is needed to end these abuses once and for all.
 
Government has said that tax avoidance is a problem best tackled at international level. Now is their opportunity to be part of this global response by dropping its opposition to these vital reforms.” 
 
Oxfam estimates that over $7 trillion of personal wealth is hidden in these offshore accounts. At least $100 billion of tax revenue is lost to developing countries alone every year. Even if half of this money was paid in taxes, the lives of 8 million women, children and babies would be saved. Ireland, the lack of tax revenue leads to essential services being cut or additional taxes imposed on ordinary citizens. 
 
ENDS
 

REPUBLIC OF IRELAND: Daniel English on +353 (0) 86 354 4954 / daniel.english@oxfamireland.org

NORTHERN IRELAND: Phillip Graham on +44 (0) 7841 102535 / phillip.graham@oxfamireland.org

 

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