EU List of Non-Cooperative Jurisdictions Updated

Another set of amendments was introduced to the EU list of non-cooperative jurisdictions, which was established in 2017 to promote good governance in taxation and inform member states on which non-EU jurisdictions are involved in harmful tax practices.

In the “Outcome for Proceedings” document dated October 5, the EU Council decided to remove Anguilla, Dominica and Seychelles from the EU list of non-cooperative jurisdictions for tax purposes. These countries had not previously met the EU’s tax transparency criteria. To be compliant, it is necessary to gain at least a ‘largely compliant’ status as defined by the OECD Global Forum on the exchange of information on request.

Having gained the status, they are now included in the state of play document, which covers jurisdictions that do not yet comply with all international tax standards but that have committed to implementing them.

Costa Rica, Hong Kong, Malaysia, North Macedonia, Qatar, Jamaica and Uruguay have been added to the list. It is necessary to draw attention they have a deadline till December 31, 2022 to adapt their legislations to fair taxation principles.

Australia, Eswatini and Maldives have completed tax reforms they had committed to and have, therefore, been removed from the document.

Botswana and Turkey are still waiting for a supplementary review. In February 2021, the Council requested Turkey to commit to automatic information exchange with all member states, and the country is in the process of carrying out this call.

Current Non-Cooperative Jurisdictions

The following states continue to be defined as those that have not taken sufficient measures to implement their tax commitments.

1. American Samoa

Does not apply any automatic exchange of financial information, has not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended, and did not commit to apply the BEPS minimum standards.

2. Fiji

Is not a member of the Global Forum on transparency and exchange of information for tax purposes, has not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended, has harmful preferential tax regimes, and has not become a member of the Inclusive Framework on BEPS or implemented BEPS minimum standard.

3. Guam

Does not apply any automatic exchange of financial information, has not signed and ratified, including through the jurisdiction they are dependent on, the OECD Multilateral Convention on Mutual Administrative Assistance as amended, and did not commit to apply the BEPS minimum standards.

4. Palau

Does not apply any automatic exchange of financial information and has not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended.

5. Panama

Does not have a rating of at least “Largely Compliant” by the Global Forum on Transparency and Exchange of Information for Tax Purposes for Exchange of Information on Request.

6. Samoa

Has a harmful preferential tax regime.

7. Trinidad and Tobago

Does not apply any automatic exchange of financial information, does not have a rating of at least “Largely Compliant” by the Global Forum on Transparency and Exchange of Information for Tax Purposes for Exchange of Information on Request, and has not signed and ratified the OECD Multilateral Convention on Mutual Administrative Assistance as amended.

8. US Virgin Islands

Do not apply any automatic exchange of financial information, have not signed and ratified, including through the jurisdiction they are dependent on, the OECD Multilateral Convention on Mutual Administrative Assistance as amended, have harmful preferential tax regimes, and did not commit to apply the BEPS minimum standards.

9. Vanuatu

Does not have a rating of at least “Largely Compliant” by the Global Forum on Transparency and Exchange of Information for Tax Purposes for Exchange of Information on Request and facilitates offshore structures and arrangements aimed at attracting profits without real economic substance.

Sources:

https://www.consilium.europa.eu/en/press/press-releases/2021/10/05/taxation-anguilla-dominica-and-seychelles-removed-from-the-eu-list-of-non-cooperative-jurisdictions/

https://data.consilium.europa.eu/doc/document/ST-12519-2021-INIT/en/pdf