By ITV News Correspondent Rupert Evelyn
ITV news has learnt that companies on a “blacklist” of EU "tax havens" can make successful applications for grants and loans via the Welsh Government Economic Resilience Fund (ERF).
The Welsh Government had previously announced a crackdown on companies and individuals based in “tax havens” from receiving public money to support them through the coronavirus pandemic.
Of the seven countries banned by Labour’s Welsh Government, only one, The Cayman Islands, appears on the “EU list of non-cooperative jurisdictions for tax purposes” - meaning that anyone or any company based in the likes of Panama or the Isle of Man could have a reasonable expectation of a successful grant or loan application through the ERF.
When asked, ITV News was told that Wales “followed Denmark and Poland's lead” in preventing companies or individuals based in “100% tax havens” from accessing coronavirus bailouts but, unlike Wales, Denmark and Poland have banned only those on the EU "blacklist".
At the time of asking, the Welsh Government had already allocated £170 million loans and grants via the ERF.
The government said 5,000 businesses had been offered support and 15,000 jobs safeguarded.
When we asked how many they had turned away because of their tax status a Welsh Government spokesperson said: “We are aware of one case”.
So how did Wales decide whose tax status is not deserving of public money?
We asked the Welsh Government for names of all countries they had banned, they gave us this list: Turks and Caicos Islands, Anguilla, British Virgin Islands, Bermuda, Cayman Islands, Bahamas and the Isle of Man.
The list it transpires was chosen from data complied by the Tax Justice Network (TJN)
Rather than opting for the TJN corporate index which ranks Netherlands at number four and the UK at number 13 of “the world’s most important tax havens for multinational corporations” the Welsh Government picked a group identified by THN as being “100% tax havens”.
A google search reveals zero results for “100% tax haven” and only three for “100 percent tax haven”.
So, we asked the Welsh Government how they define “100% tax haven” and were told “there is no universal definition for a tax haven.
"Generally it is defined as; 'a country in which the taxation of foreigners or foreign companies is exploited on advantageous terms in order to reduce the tax burden in the actual home country'.
"The term 'tax haven' is not clearly defined.”
So who are they quoting in their general definition?
Answer: “We are using the Corporate Tax Haven Index definition.”
We spoke to THN who compile the index and they confirmed they did not have a specific definition.
More Googling reveals the quote has only ever been used 35 times and not by THN.
The Welsh Government did say: “Every large business application is assessed on its merits, business case and benefit to the Welsh economy.
"Although a company is able to apply, this does not automatically mean it will be awarded grant or funding.”
Plaid Cymru MS and Shadow Economy Minister Helen Mary Jones said: “We supported the Welsh Government decision not to support companies based in tax havens because that was the right thing to do.
"It is therefore very disappointing that they appear to have used such a narrow definition of what constitutes a tax haven.
"I would urge Welsh Government to urgently review this decision.”