The British Virgin Islands, Costa Rica, the Marshall Islands and the Russian Federation are set to join the EU’s ‘blacklist’ of non-cooperative jurisdictions, increasing from 12 to 16, according to an EU Council document obtained by EUROPE. The list is expected to be adopted at the Ecofin Council on Tuesday 14 February.
These four countries would join American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the US Virgin Islands, Vanuatu, Anguilla, the Bahamas and Turks and Caicos (see EUROPE 13035/32). These new countries are currently on the European ‘grey’ list of jurisdictions that have made commitments on good tax governance.
According to the document, the BVI are not classified as at least ‘largely compliant’ by the Global Forum on Transparency and Exchange of Information.
Costa Rica is reportedly on the list because of its harmful foreign source income exemption regime and has not yet resolved this issue. It is committed to following up on the Global Forum’s recommendations in due course, so as to achieve at least an ‘in place, but needs improvement’ rating for the core requirements of transparency and tax fairness in the Global Forum’s peer review report in autumn 2024.
The Marshall Islands are said to facilitate offshore structures and arrangements designed to attract profits without real economic substance and to have failed to take all necessary steps to ensure the effective implementation of substantive requirements for tax fairness.
As for the Russian Federation, it has reportedly not resolved the issue of its harmful preferential tax regime for international holding companies.
As for the European ‘grey’ list of jurisdictions that have made commitments on good tax governance, Aruba, Belize, Curaçao and Qatar are expected to join.
The first three would not meet the criteria for tax transparency in terms of automatic information exchange. They will join Turkey, Botswana, Dominica, Seychelles and Israel.
Qatar, on the other hand, is reportedly failing to comply with tax fairness because of its harmful foreign source income exemption regime, which it had committed to change or abolish by the end of 2022. It has been given until 31 March 2023 to adapt its legislation with regard to anti-abuse rules and economic substance requirements. It would join Hong Kong, Malaysia, Jordan, Eswatini (ex-Swaziland) and Armenia.
Belize, Israel, Montserrat, Vietnam and Thailand have reportedly not completed their implementation of Country-by-Country Reporting (CbCR).
In contrast, Barbados, Uruguay, Jamaica, North Macedonia and Bermuda will be removed from the ‘grey’ list.
To consult the document: https://aeur.eu/f/5ac (Original version in French by Anne Damiani)