BRUSSELS, WILLEMSTAD - The European Union gave Curaçao until December 31 the time to ensure that the tax system complies with international standards. Brussels has informed Finance Minister Kenneth Gijsbertha by letter.
It can be concluded from the letter that Curaçao was almost placed on the black list of tax havens. Only by promising "at a high political level" to change the tax legislation in three parts before the end of the year, the Curacao government was able to prevent this.
A new review will take place at the beginning of 2020. If it then appears that Curaçao has not fulfilled its commitment, the country will still be blacklisted.
Broadly speaking, 'tax havens' provide taxpayers, both legal and natural persons, with opportunities for tax avoidance, while their secrecy and opacity also serves to hide the origin of the proceeds of illegal and criminal activities. One might ask why establishing a list of tax havens or high-risk countries is useful.
Drawing up such lists started with action to stop harmful tax practices arising from the discrepancy between the global reach of financial flows and the geographically limited scope of jurisdictions, matching or inside national borders. However tax havens are referred to, they all have one thing in common: they make it possible to escape taxation. Distinctive characteristics of tax havens include low or zero taxation, fictitious residences (with no bearing on reality) and tax secrecy. The last two are key methods for hiding ultimate beneficial owners. In the EU, the process of adopting a common list of non-cooperative tax jurisdictions, which is also central to determining whether a third country presents a high risk in relation to money-laundering, was initiated as part of efforts to further good tax governance, and its external dimension.
On 5 December 2017, the European Council adopted a first common list resulting from the assessment of third countries against distinctive criteria. Pursuing the assessment process, the Council has updated the list based on commitments received, while also reviewing countries that had not yet been assessed.’
