On 12 March 2019 EU Finance Ministers updated the EU list of non-cooperative tax jurisdictions. The update was required since many countries have changed their laws and tax systems to comply with international standards. 92 jurisdictions are assessed based on three criteria: tax transparency, good governance and real economic activity, as well as one indicator, the existence of a zero corporate tax rate. The last update of the list shows that 60 countries took action on the Commission’s concerns and over 100 harmful regimes were eliminated.
The ministers blacklisted 15 countries, 5 of them (American Samoa, Guam, Samoa, Trinidad and Tobago, and US Virgin Islands) have stayed on the black list since its first adoption in 2017, the other 10 have been moved back from the grey list to the black list since they do not follow measures proposed by the Commission. These 10 jurisdictions are: Barbados, United Arab Emirates, Marshall Islands, Aruba, Belize, Bermuda, Fiji, Oman, Vanuatu and Dominica.
Another 34 countries will continue to be monitored in 2019 (grey list), while 25 countries from the original screening process have now been cleared. In the near future, all 15 jurisdictions will receive a letter explaining the decision and what they can do to be de-listed.
The Commission and Member States (Code of Conduct Group) will also continue to monitor the jurisdictions that have until the end of 2019/2020 to deliver, and assess whether any other countries should be included in the EU listing process. The following screening of tax practices by the Commission will be enhanced with more compulsory transparency criteria to be respected and three G20 countries added to the next screening, Russia, Mexico and Argentina. The Commission will also continue to support Member States’ work to develop a more coordinated approach to sanctions for the EU list in 2019. In addition, new provisions in EU legislation prohibit EU funds from being channelled or transited through entities in countries on the tax blacklist. More information regarding development of the EU list is available here.
The article is part of dReport – March 2019, Tax news; Grants and investment Incentives.
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