EU to extend deadline for Turkey to avoid tax blacklisting

The European Union has taken a preliminary decision to grant an extension for Turkey to meet tax transparency requirements, Reuters said on Wednesday, citing two diplomatic sources.

The EU set up a blacklist of tax havens 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 should in theory be listed, but for political reasons it avoided it,” Reuters quoted an EU diplomat as saying.

Turkey was given until the end of 2020 to satisfy the requirements, according to a second EU diplomat. But the preliminary decision will be discussed at a new meeting of diplomats on Friday and it would need the approval from the bloc's finance ministers slated to meet next week.

Turkey and the EU have been both conflicting and collaborating on numerous fronts. Talks on Turkey’s full membership to the EU have slowed to a halt since 2016 due to concerns over democratic and human rights record after a failed coup attempt.