The two British Caribbean overseas territories, Anguilla and the Turks and Caicos Islands, as well as the Bahamas are expected to be added to the European ‘black list’ of non-cooperative jurisdictions for tax purposes, on Tuesday 4 October in Luxembourg at the next ‘Economic and Financial Affairs’ Council.
All three countries were already on the EU’s ‘grey’ list of third countries and jurisdictions with commitments in this area. The EU criticised these countries for their lack of transparency, the existence of tax regimes that facilitate the creation of offshore structures and/or a failure to prevent tax base erosion and profit shifting.
The Turks and Caicos Islands and the Bahamas were only added to this European ‘grey’ list last February, when the list was last updated (see EUROPE 12887/13). They are expected to join nine other countries - American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the US Virgin Islands and Vanuatu - on the EU’s ‘blacklist’, bringing the number of countries on the list to twelve (see EUROPE 12898/25).
Anguilla and the Bahamas have already been added and removed from the list several times.
According to the draft conclusions obtained by EUROPE, the ‘Ecofin’ Council “regrets [...] that a number of jurisdictions failed to fulfil their commitments to the Code of Conduct Group with regard to economic substance requirements”. It will invite them to cooperate with the Code of Conduct Group to solve the remaining problems.
The EU’s ‘grey’ list of third countries and jurisdictions that have made commitments on good tax governance should also be expanded from 22 to 23 countries. The Code of Conduct Group wants to add Eswatini and Armenia, which do not comply with tax fairness, because of the existence of harmful tax regimes. Eswatini has set up a special economic zone and Armenia has free economic zones. These jurisdictions have committed to change or eliminate preferential tax regimes in the context of the Forum on Harmful Tax Practices by the end of 2023. Tunisia has been removed from the ‘grey’ list.
The draft Council conclusions also focus on the case of Turkey. While the Council “takes notes of the effective automatic information exchange between Turkey and the Member States, it regrets that Turkey has not made any progress with one Member State”, namely Cyprus, and reiterates its call for an effective exchange with all Member States.
To read the EU Council document: https://aeur.eu/f/39j (Original version in French by Anne Damiani)