After much debate and scrutiny, an EU blacklist of jurisdictions deemed not to be cooperative on tax matters has been agreed. The announcement came following a meeting of the EU’s Economic and Financial Affairs Council, attended by the finance ministers of each Member State.
The list, officially called the Common EU List of Non-Cooperative Jurisdictions, includes the following 17 territories:
• American Samoa
• The Marshall Islands
• South Korea
• St. Lucia
• Trinidad and Tobago
• The United Arab Emirates.
Work on the list began in 2015. Originally 92 countries were screened for compliance with the EU’s transparency criteria, and earlier this year, 53 were warned that unless they changed their tax rules, they risked being included on the blacklist.
The full consequences for jurisdictions on the blacklist will be decided in the coming weeks, although the document outlining the blacklist suggest a number of defensive measures Member States could take against non-cooperative jurisdictions. States such as Luxembourg have been reported to favour not implementing any sanctions whilst others, including France, are thought to be advocating tough measures.
The list will be reviewed annually, with a report on the progress of jurisdictions expected before summer 2018. The EU has also announced that in the future the assessment criteria will be expanded to include the transparency of beneficial ownership information.
In addition to the blacklist, a so-called grey list of a further 47 territories has been drawn up. These jurisdictions have fallen short of the EU’s criteria but have also committed to raising their standards. If they fail to abide by their commitments they will face being placed on the blacklist.
STEP will continue to monitor the situation closely, particular in regards to what happens to those on the grey-list and any further sanctions, and will provide further updates when necessary.