Scotland: restrictions for businesses connected to tax havens

Schedule 4 to the Coronavirus (Scotland) (No. 2) Bill ‘other measures in response to coronavirus’ has been amended during its passage through the Scottish parliament to prevent coronavirus support grants being paid to companies based in tax havens. New Part 11, which forms part of the final version of the Bill, as passed by the parliament, requires the Scottish ministers, before providing a coronavirus-related grant, to ‘take steps to satisfy themselves’ that the recipient:

• is not based in a tax haven;
• is not the subsidiary of a company based in a tax haven;
• does not have a subsidiary based in a tax haven; and
• is not party to an arrangement under which any of its profits are subject to the tax regime of a tax haven.

Proposing the amendment, Green Party MSP Patrick Harvie said ‘the taxpayer-funded bailout, and the public money that is going to the private sector, important though it is, must come with some expectation that a fair contribution will be made by the recipients. In particular, that money should not go to bail out firms that are based in tax havens.’

For the purposes of Part 11, the definition of ‘tax haven’ is based on the EU list of non-cooperative tax jurisdictions (the EU ‘blacklist’).

The Welsh government has also announced that ‘businesses owned by a company or individual living in a 100% tax haven will not be eligible for financial support from the Welsh government’s economic resilience fund’.