EU sets deadline for Turkey on tax blacklist: diplomats

BRUSSELS: EU member states gave Turkey until June to comply with key demands on tax transparency or face being put on the bloc's tax haven blacklist, diplomats said on Tuesday.

The deadline was a compromise over divisions among the 27 member states on how to handle the issue as ties with Ankara are on edge, most recently over gas exploration in the eastern Mediterranean.

The tensions have eased in recent weeks with the diplomacy of Germany, which is sensitive about keeping Turkey compliant with a pact that restricts immigration into the EU.

According to diplomats, the EU has again kept Turkey on its so-called grey list of offenders, countries that have been asked to make changes to their policy and are given the time to do it.

One diplomat spoke of a "very tough" June deadline. If Turkey fails to deliver by then, he said, Ankara would be blacklisted in the next update to the list in October.

Another member state said the decision to blacklist Ankara if the deadline was not met was "not automatic" and would have to be discussed again.

Turkey is accused of failing to comply with international standards on the automatic exchange of tax information, a problem that Ankara argues is complicated by the big Turkish diaspora in EU countries.

Several EU member states -- France, Greece, Cyprus and Austria among them -- opposed giving Turkey more time to comply, but a big push by Germany stopped the blacklisting for now.

The EU states had already granted Turkey a grace period until the end of December.

The EU meanwhile will add Dominica to the blacklist and remove Barbados, diplomats said.

Once formally approved, the list will comprise: Anguilla, American Samoa, Dominica, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu.