Malta’s taxation system would be blacklisted by the EU, but for a system giving member states an automatic exemption, according to an anti-poverty organisation.

Oxfam published a report dubbed "Off the Hook: How the EU is about to whitewash the world’s worst tax havens" a week before officials in Brussels were set to publish a blacklist of countries based on their tax systems.

The EU blacklist did not even take member states into account, since it believed they already "complied with tax criteria," the organisation said.

The move badly damaged the credibility of the process, because "in reality Ireland, Luxembourg, Malta and the Netherlands are among the most significant tax havens in the world," Oxfam said.

Current tax rules allow telecommunications operator giant Vodafone Group PLC to allocate nearly 40 per cent of its taxable profits to Malta and Luxembourg, Oxfam noted.

The EU review – the first of its kind – was set to give nine of the "world’s worst tax havens a clean bill of health", Oxfam said. Among others, the anti-poverty organisation said jurisdictions like the Bahamas, the British Virgin Islands and Panama were likely to be entirely de-listed by the EU.

Oxfam has repeatedly decried Malta as a tax haven. In 2017, it said Malta should be included in the EU tax haven after analysing it based on its "fair taxation criteria".

The organisation annually expresses its concerns that EU governments will present a weak or even empty blacklist. When Malta held the EU presidency it had publicly advocated for an empty blacklist, Oxfam had said.

The EU published its tax haven blacklist in December 2017. It currently blacklists five small island states, while another 63 countries that have promised to reform their tax practices are on a 'grey list'.

Political interference in the screening also risked tax havens like Switzerland and the United States were unlikely to feature on the blacklist, the report’s author Johan Langerock said.

Oxfam is calling on EU governments to strengthen the blacklist criteria, ensure the screening process is free from political interference, and monitor tax reforms being implemented by 'grey list' countries to ensure they are effective.

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