Blacklists of tax havens and special supervision of companies located in these countries are the most common way of combating harmful tax competition - according to the analysis of the international network of independent tax advisors by the PAP.
Taxand analysis since December 2015 until March 2016 In 32 countries have shown that most countries (23) keeps a special list of tax havens. In Poland, this list is included in the MF Regulations on the identification of countries and territories applying harmful tax competition in the field of income tax.
Similar lists include: France, Greece, Spain, Colombia, Norway, Peru, Portugal, Russia, Turkey, Ukraine, Venezuela, Italy.
The criteria that are taken into account when deciding to put a country on the list of tax havens often overlap in individual countries. Attention is drawn to whether a country has concluded an agreement on the exchange of information (and such information it provides) or a double taxation agreement; an effective level of taxation; transparency of the taxation system and a tendency to cooperate with the tax administration of the country concerned.
Typically, companies associated with countries included in the tax haven list have to face additional information and administrative responsibilities, refusal of preferential tax treatment of individual events arising from local tax rules or EU directives, or general increase in fiscal burden.
In the latter case, for example, the increase in the tax base of a foreign company, higher withholding tax rates, automatic submission to CFC rules (concerning a foreign controlled company), the need to recognise income from a company located in a tax paradise (even if there is no actual distribution to a shareholder), the limits on the deduction of costs in flows with a country from a tax paradise, or the prohibition on the settlement of losses of a company from a tax haven.
The authors of the study estimate that the results are already visible – more and more countries considered previously to be tax havens agree to implement specific demands. Poland's relations with the islands of Jersey and Guernsey and the Isle of Man are an example. Several years ago, they were deleted from the Polish list of tax havens because they concluded information exchange agreements and limited double taxation agreements with Poland.
Harmful tax competition is applied in tax systems in the following countries and territories:
- • the Principality of Andorra;
- • Anguilla — Overseas Territory of the United Kingdom of Great Britain and Northern Ireland;
- • Antigua and Barbuda;
- • Aruba/Sint-Maarten/Curacao — The territories of the Kingdom of the Netherlands;
- • the Commonwealth of the Bahamas;
- • The Kingdom of Bahrain;
- • Barbados;
- • British Virgin Islands — Overseas Territory of the United Kingdom of Great Britain and Northern Ireland;
- • Cook Islands – Local Territory Associated with New Zealand;
- • the Commonwealth of Dominica;
- • Grenada;
- • Sark — British Crown Dependent Territory;
- • Hong Kong — Special Administrative Region of the People's Republic of China;
- • the Republic of Liberia;
- • The Principality of Liechtenstein;
- • Macau — Special Administrative Region of the People's Republic of China;
- • the Republic of Maldives;
- • the Republic of the Marshall Islands;
- • the Republic of Mauritius;
- • the Principality of Monaco;
- • Republic of Nauru;
- • Niue – Local Territory Associated with New Zealand;
- • the Republic of Panama;
- • Independent State of Samoa;
- • the Republic of Seychelles;
- • the Federation of Saint Kitts and Nevis;
- • Saint Lucia;
- • Saint Vincent and the Grenadines;
- • The Kingdom of Tonga;
- • United States Virgin Islands – Non-Incorporated Territory of the United States;
- • Vanuatu Republic.
Source: Kurier PAP - www.kurier.pap.pl