EU to give Turkey more time to avoid tax blacklisting, sources say

European Union diplomats have reached a preliminary agreement to give Turkey more time to meet tax transparency requirements, two diplomatic sources said, in a move that could weaken the bloc's blacklist but at the same time avoid a new clash with Ankara.

The EU set up a blacklist of jurisdictions in 2017 that could facilitate tax evasion because of lax or opaque tax regimes. That followed revelations of widespread avoidance schemes used by corporations and wealthy individuals to lower their tax bills.

To avoid blacklisting, Turkey was required to adopt laws by the end of last year to automatically exchange tax information with EU states. But despite having been given more than one year to meet the requirement, it failed to do so by the set deadline.

"Turkey should in theory be listed, but for political reasons it avoided it," an EU diplomat told Reuters.

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