The European Commission has indicated that it may compel EU third countries to agree to proposed global tax standards or face going on a blacklist.

Its stance on this issue coincides with today's (1 June) launch of the European Tax Observatory, a new research laboratory to assist in the EU's fight against tax abuse.

The Organisation for Economic Co-operation and Development is currently undertaking work to reach a deal on overhauling the international tax system - with the objective of reaching a deal by mid-2021.

This activity relates to so-called ‘pillar 1' work around partial reallocation of taxing rights and ‘pillar 2' discussions around minimum effective taxation of multinationals' profits.

If agreed, the European Commission has said it will move to incorporate the tax changes into EU law and encourage other jurisdictions to follow suit.

That could have implications for jurisdictions such as Guernsey, which has a general zero corporate tax with a number of exceptions, the Guernsey Press reported today (1 June).

The commission said in a new document on business taxation: "As reflected in the recent Communication on Tax Good Governance in the EU and Beyond, the commission will propose to introduce Pillar 2 in the criteria used for assessing third countries in the EU listing process, so as to incentivise them to join the international agreement,' said the commission in a new document setting out its thinking on business taxation.

‘This is in line with the EU's existing approach to use the listing process to promote internationally agreed good practices.'

The comments could be seen as a nod to pressure by MEPs to overhaul the EU's Code of Conduct Group of business taxation, which assesses whether jurisdictions have harmful practices or not, the Guernsey Press said.

In a separate announcement, the EU funded European Tax Observatory was launched to "support EU policy-making through cutting-edge research, analysis and data-sharing".

It said the Observatory will be fully independent in conducting its research, objectively informing policymakers and suggesting initiatives that could help to better tackle tax evasion, tax avoidance and aggressive tax planning.

Headed by Professor Gabriel Zucman, and based at the Paris School of Economics, the Tax Observatory will be a source of new ideas for combating tax avoidance and an international reference for the study of taxation in a globalised world.

Paolo Gentiloni, Commissioner for Economy, said: "Today more than ever, we need to clamp down on tax abuse. It's vital that we protect the public revenues necessary to support the recovery and the massive investments needed for the green and digital transitions. I count on the European Tax Observatory to conduct research of the highest level, to bring forward innovative ideas and to promote an inclusive and pluralistic debate on taxation policies across the EU."