EU Economic And Financial Affairs Council Decides To Add Ten Additional Jurisdictions To Non-Cooperative List

; posted on
March 14th, 2019

The EU Economic and Financial Affairs Council has issued a release on the main results from its 12 March 2019 meeting, including that it has adopted a revised list of non-cooperative jurisdictions for tax purposes. In addition to the five jurisdictions that were already listed, American Samoa, Guam, Samoa, Trinidad and Tobago and the U.S. Virgin Islands, the revised EU list now also includes Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, the Marshall Islands, Oman, the United Arabic Emirates, and Vanuatu.

Background

The EU blacklist of non-cooperative jurisdictions for tax purposes, first adopted on December 5, 2017, is part of the EU's external strategy for taxation as defined by the Council, and is intended to contribute to ongoing efforts to prevent tax avoidance and promote tax good governance worldwide.

Since the first EU blacklist, the list has already been revised six times. On January 23, 2018, eight jurisdictions were removed from the blacklist. Later, on March 13, 2018, the Council removed three more countries and added the Bahamas, Saint Kitts and Nevis and the US Virgin Islands. On May 25, 2018, the ECOFIN agreed to remove the Bahamas and Saint Kitts and Nevis, followed by Palau and Namibia on October 2 and November 6, 2018. And as the latest, On 12 March, EU has added another 10 countries to the list.

Revised EU blacklist

During 2018, most of the countries and territories on the blacklist engaged in constructive dialogue with the EU and took commitments to comply with the EU’s criteria. As such, by the end of 2018, only American Samoa, Guam, Samoa, Trinidad and Tobago and the US Virgin Islands remained on the blacklist. Most of the commitments taken by third country jurisdictions were given a deadline of the end of 2018 and their enactment into national law was carefully monitored at a technical level by the Code of Conduct Group on business taxation until the beginning of 2019.

The monitoring process revealed that the following ten jurisdictions either failed to deliver on their commitments by the agreed upon deadline or made no commitment to addressing the EU’s concerns: Aruba, Barbados, Belize, Bermuda, Dominica, Fiji, Marshall Islands, Oman, United Arab Emirates and Vanuatu. According to the European Commission, these jurisdictions did not engage with the EU and failed to address the tax good governance shortcomings identified as part of the review process. In particular, these are the following reason used by EU to drag the concerning jurisdiction into EU blacklist:


Reason


Jurisdiction

These jurisdictions facilitate offshore structures and arrangements aimed at attracting profits without real economic substance and has not yet resolved this issue.

Vanuatu, The United Arab Emirates, the Marshall Islands, and Bermuda,

These jurisdictions have not yet amended or abolished one harmful preferential tax regime

Aruba, Barbados, Belize, and Fiji

These jurisdictions do not apply any automatic exchange of financial information, have not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended, and have not yet resolved these issues.

Dominica and Oman

 

 


Consequently, the aforementioned jurisdictions have been added to the revised blacklist, which is now comprised of fifteen jurisdictions.

Source: EU Council

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