The European Union may include Turkey on a blacklist of tax havens as soon as next month, in a move that could further strain ties between Ankara and the world’s largest trading bloc, Bloomberg reports.
An EU working group tasked with screening “non-cooperative jurisdictions for tax purposes” concluded that Turkey’s commitments to address transparency issues and abolish sweetheart tax regimes are so far “not sufficient,” according to people familiar with the matter and confidential documents seen by Bloomberg.
The so-called Code of Conduct group could recommend to EU finance ministers to add non-compliant countries to a blacklist on Dec. 5.
While EU countries are split over whether financial sanctions should be used against such uncooperative jurisdictions, inclusion in the blacklist may result in reputational damage to Turkey and raise pressure on EU companies to hold back investment. Several states, including France, support punitive measures, such as the exclusion from international funding, though no decision has been taken.
