On Tuesday, 20 February, the EU removed four jurisdictions from its tax haven blacklist: the Bahamas, Belize, Seychelles and Turks and Caicos Islands. The list of “non-cooperative jurisdictions for tax purposes” was first established in 2017, after multiple scandals, such as the Panama Papers, put Brussels under pressure to have a closer look at tax evasion. The list is updated twice a year, if applicable.
“This EU list of non-cooperative tax jurisdictions includes countries 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 necessary reforms”, the European Council explained in a press release.
In order for jurisdictions not to be featured on the list, they should comply with objective tax good governance criteria. Tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting are the ground rules of those criteria. Moreover, EU Member States are automatically exluded from the blacklist.
However, not everyone agrees to the update. Anti-poverty group Oxfam in particular critiques the decision. “Today’s update highlights once again that, without reform, this list is a waste of everyone’s time. The Bahamas is one of the world’s worst tax havens, yet it has been removed from the list. The same for the Seychelles, a hotbed of shell companies where multinationals reap massive profits. Meanwhile, EU tax havens get a free pass. If the EU is serious about ending tax avoidance, the new (European) Commission must urgently overhaul this list to serve its intended purpose,” Chiara Putaturo, Oxfam EU tax expert, said in a statement.
After the removal of the four jurisdictions, twelve remain under close observation: American Samoa, Anguilla, Antigua and Barbuda, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, US Virgin Islands and Vanuatu. “The Council regrets that these jurisdictions are not yet cooperative on tax matters and invites them to improve their legal framework in order to resolve the identified issues”, the Council said.
Other than the EU list of non-cooperative jurisdictions for tax purposes, the Council also keeps a so-called state of play document. This list reflects the ongoing EU cooperation with its international partners and the commitments of these countries to reform their legislation to adhere to agreed tax good governance standards. Its purpose is to recognise ongoing constructive work in the field of taxation and to encourage the positive approach taken by cooperative jurisdictions to implement tax good governance principles.
