LONDON • The UK achieved its first major victory against other European Union nations since voting to leave the bloc when it prevented its offshore territories from being automatically included in a planned tax haven blacklist.
More than four months after it voted to leave the EU, Britain on Tuesday fought off an attempt by a group of countries, led by France, to denounce territories with a zero per cent rate of corporation tax as potentially "non-cooperative".
That would have collared its islands such as Jersey, Bermuda and the Cayman Islands, which attract hundreds of businesses because of their generous taxation regimes, and would have dealt another blow to the UK's already strained relationship with the rest of the EU.
The blacklist was one of a raft of measures the EU put forward earlier this year to tackle tax evasion and wrestle the issue back from populist groups which seized on the leak in April of documents from the Panamanian law firm Mossack Fonseca that exposed billions of dollars hidden in tax havens worldwide.
The EU's work on the issue will proceed without specific reference to zero-per cent rate territories.
The blacklist "will encourage those few tax jurisdictions that refuse to follow internationally agreed best practice to do the right thing", said a British official.
Britain teamed up with Ireland and the Baltic nations in defeating the plan to class zero-rate jurisdictions as one of three categories the bloc will take into account when drawing up its blacklist to be published at the end of next year, according to EU officials. With tax matters needing unanimous consent of all 28 EU countries, the UK signalled that it may block the entire initiative if it did not get its way, said the officials.
The EU has not completely ruled out the inclusion of zero-rate tax jurisdictions on its blacklist. A group of tax experts representing EU nations will study the feasibility of including them in a list of criteria. The UK and France accepted this compromise.