EU Council Agrees Tax Blacklist Changes
by Jason Gorringe, Lowtax.net, London
23 February, 2021
Barbados has been removed from the European Union's list of non-cooperative jurisdictions and Dominica has been added.
The list includes jurisdictions worldwide that either have not engaged in a constructive dialogue with the EU on tax governance or have failed to deliver on their commitments to implement the reforms necessary to comply with a set of objective tax good governance criteria. These criteria relate to tax transparency, "fair taxation", and implementation of international standards designed to prevent tax base erosion and profit shifting (BEPS).
The changes to the list take into consideration the ratings recently released by the OECD Global Forum for Transparency and Exchange of Information (Global Forum) as regards the exchange of information on request. For the purposes of the list, the EU requires jurisdictions to be at least "largely compliant" with the international standard on transparency and exchange of information on request (EOIR).
Dominica has been included in the EU list as it received a "partially compliant" rating from the Global Forum and has not yet resolved this issue.
Barbados was added to the EU list in October 2020 after it received a "partially compliant" rating from the Global Forum. It has now been granted a supplementary review by the Global Forum and has therefore been moved to a state-of-play document, pending the outcome of the review.
The state-of-play document identifies jurisdictions that do not yet comply with all international tax standards but have made sufficient commitments to implement tax good governance principles. The document has also been updated to reflect various other changes endorsed by the Council.
For instance, Morocco, Namibia, and Saint Lucia have been removed from the document as they have fulfilled all their commitments. Jamaica has been added as it has committed to amend or abolish its harmful tax regime (its special economic zone regime) by the end of 2022.
Australia and Jordan have been granted an extension to the deadline for fulfilling their commitments, until the assessment of their reforms by the OECD Forum on Harmful Tax Practices. Maldives, meanwhile, has been given four additional months to ratify the OECD Multilateral Convention on Mutual Administrative Assistance.
Turkey was requested to solve all open issues as regards effective exchange of information with all member states. The EU Council said Turkey is expected to commit at a high political level by May 31, 2021, to effectively activate its automatic information exchange relationship with all 27 member states by June 30, 2021.
Following the February 2021 update, there are 12 jurisdictions on the list of non-cooperative jurisdictions: American Samoa, Anguilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands, and Vanuatu.
Nine jurisdictions have made commitments to reform their tax policies and currently appear in the EU's state-of-play document: Australia, Barbados, Botswana, Eswatini, Jamaica, Jordan, Maldives, Thailand, and Turkey.
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