Which EU member states have been labeled as tax havens domestically or internationally, and what defensive measures have other EU countries used against them?
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Executive summary
Several EU member states—most prominently Luxembourg, Malta, Ireland, the Netherlands and Cyprus—have been publicly accused of exhibiting “tax haven” traits by the European Parliament and commentators, even though the EU’s formal blacklist names only non-EU jurisdictions and not Member States [1]. In response, EU countries deploy a patchwork of defensive measures at national level—ranging from conditional withholding taxes, stricter controlled-foreign-company rules and denial of tax deductions to administrative audits and exclusion from EU funds—while the Council and Commission coordinate an external blacklist for third countries [2] [3] [4] [5].
1. The distinction that matters: internal accusations vs. the EU “blacklist” for third countries
Public and parliamentary criticism of certain EU members’ tax practices is real—on 27 March 2019 the European Parliament voted in favour of a report that described Luxembourg, Malta, Ireland, the Netherlands and Cyprus as displaying traits of a tax haven or facilitating aggressive tax planning—yet the EU’s formal “common list” (the EU list of non-cooperative jurisdictions) is explicitly for third countries and does not list EU Member States [1] [6].
2. Who has been labeled domestically or internationally as “tax havens”?
Internationally, the EU’s own formal blacklist targets non-EU jurisdictions (updates and named non-cooperative third countries are published by the Council/Taxation & Customs Union) and has included places such as Panama, Russia and a range of offshore territories in recent rounds [7] [6]. Domestically and politically inside the EU, however, Luxembourg, Malta, Ireland, the Netherlands and Cyprus have been singled out by the European Parliament and watchdog coverage as having tax-haven–like regimes—an allegation that has driven public debate though it hasn’t translated into their formal inclusion on the EU third‑country list [1].
3. The toolkit: tax defensive measures used by Member States
Member States deploy a common menu of defensive measures against jurisdictions on the EU third‑country list and, separately, via national lists and rules; these measures include stricter controlled foreign company (CFC) rules, extended or conditional withholding taxes on interest, royalties and (in some cases) dividends, denial of tax deductions for payments to blacklisted entities, and increased administrative audits and reporting obligations [4] [3] [8]. Germany’s Tax Haven Defence Act (StAbwG), for example, tightens CFC rules, extends withholding taxation and can block exemptions for dividends and capital gains relating to long‑listed jurisdictions [4]. The Netherlands has adopted a conditional withholding tax regime covering interest, royalties and—since 2024—dividends for payments to entities in jurisdictions on the EU list or its own low‑tax list [3].
4. Non‑tax defensive measures and funding consequences
Beyond tax code changes, the Council and Commission say Member States may apply non‑tax countermeasures: exclusion from certain EU funds, administrative blacklisting effects and transaction-level obstacles; being on the EU list does not necessarily bring direct fines but can prohibit EU funding flows and trigger domestic penalties and more frequent audits [5] [7]. The Consilium notes that many Member States combine administrative and legislative defensive measures and that consistent application of those measures is seen as essential for the list’s effectiveness [2].
5. Fragmentation, politics and limits of the approach
The result is a fragmented landscape: a common EU process screens and lists third countries (and can bar them from funds), while Member States retain discretion to maintain national lists and to adopt their own, sometimes stricter, domestic defensive measures—leading to uneven treatment across the bloc and political pressure to broaden targets [9] [2]. Critics and analysts also question the blacklist’s practical bite—blacklisting can spur audits and funding restrictions but does not automatically close regulatory arbitrage or stop multinational structures—prompting Member States to layer national rules like denial of deductions or participation exemptions conditioned on counterpart jurisdiction status [5] [10] [11].
6. What reporting shows and what remains unclear
EU institutions and tax firms document that 21 Member States have used both administrative and legislative defensive steps against listed jurisdictions and that many nations apply at least two of the recommended measures, but the precise operational impact—how much profit‑shifting is deterred, or how companies rearrange activity in response—remains contested and outside the scope of the cited reporting [2] [3]. Where assertions about EU Member States themselves being “tax havens” are made, those stem largely from parliamentary reports and watchdog narratives rather than the EU third‑country listing process, which by design targets non‑EU jurisdictions [1] [6].