EU likely to give Turkey another extension to avoid tax blacklisting

The European Union is considering to grant another extension for Turkey to meet the bloc’s tax transparency requirements.

European Union Economic and Financial Affairs Council (Ecofin) has given Turkey until the end of 2020 to comply with the bloc’s demands on tax transparency last February, or else risk being added to a list of countries that could be slapped with financial sanctions.

Ecofin on Tuesday will re-evaluate its prior decision and set another deadline for Turkey to avoid being blacklisted, French newspaper Le Figaro reported on Friday, citing European diplomats.

European economy and finance ministers update the list called “tax heaven” twice a year, in every February and October.

According to Le Figaro, France, Austria, Denmark, Greece and Cyprus are insisting on setting strict rules and dates for a possible extension.

Another group of member countries led by Germany on the other hand are sceptic about Turkey being blacklisted, it said.

The EU set up a blacklist of tax heavens in December 2017 to encourage transparency and fairer tax competition, while preventing and stopping tax fraud, evasion and avoidance.

Those on the blacklist are said to allow widespread tax evasion by corporations and individuals, and do not meet the bloc's deadlines for reform.

Turkey currently doesn’t comply with the EU requirements and Ankara had until the end of the year to fall in line.

The tax heaven debate is one of numerous issues between the EU and Turkey, whose full membership talks to the bloc has come to a halt since 2016 due to concerns over its democratic and human rights record in the aftermath of a failed coup attempt. 

Turkey’s gas dispute with Greece and Cyprus in eastern Mediterranean waters, also became another key conflict between Ankara and the bloc. In March summit, EU will consider tough sanctions on Turkey, on regard of its drilling activities in the region.