EU Updates Non-Cooperative Jurisdictions List, Removes Caribbean Nations from Blacklist
News Americas, NEW YORK, NY, Mon. Feb. 26, 2024: The European Union has updated its list of non-cooperative jurisdictions for tax purposes, removing several Caribbean nations from its so-called Blacklist.
TCI is now off the EU’s blacklist.
The European Blacklist: Purpose and Criteria
The European blacklist, created in 2017 in the wake of scandals such as the Panama Papers and LuxLeaks, is meant to encourage other countries and jurisdictions to “adopt fair tax policies” and “increase tax transparency.”
Caribbean Countries Removed from the Blacklist
The EU announced that these three Caribbean countries are now off its “Blacklist.” They are:
1: The Bahamas
2: Belize
3: The Turks and Caicos Islands.
Jurisdictions Still Under Scrutiny
Those still under scrutiny for their tax governance practices are:
1: Anguilla
2: Antigua and Barbuda
3: Trinidad and Tobago
4: US Virgin Islands
EU Encouragement for Reforms
The EU encourages these jurisdictions to amend their legal frameworks to address identified tax governance shortcomings. Included in the list are countries that have either not participated in constructive dialogue with the EU regarding tax governance or have not fulfilled their commitments to enact necessary reforms. These reforms are expected to align with the EU’s objective criteria for tax governance, which emphasize tax transparency, fair taxation, and the prevention of tax base erosion and profit shifting.
Revisions and Oversight
The list is revised biannually, in February and October, to reflect changes and is overseen by EU finance ministers. Notably, recent assessments by the Organisation for Economic Co-operation and Development (OECD) Forum of Harmful Tax Practices (FHTP) identified issues in the Bahamas and Turks and Caicos Islands related to enforcing economic substance requirements. However, subsequent recommendations were softened, leading to their compliance with standards for jurisdictions with minimal corporate income tax.
Conclusions
The EU’s updated list aims to promote fair tax policies and increased transparency among non-cooperative jurisdictions. The removal of Caribbean countries from the blacklist is a significant step towards achieving this goal. As the list continues to evolve, it remains essential for jurisdictions to prioritize tax governance reforms and maintain open dialogue with the EU.
Frequently Asked Questions
Q: What is the purpose of the EU’s non-cooperative jurisdictions list?
A: The list aims to encourage other countries and jurisdictions to adopt fair tax policies and increase tax transparency.
Q: Which Caribbean countries were removed from the blacklist?
A: The Bahamas, Belize, and the Turks and Caicos Islands were removed from the blacklist.
Q: What are the criteria for inclusion on the list?
A: Countries must have not participated in constructive dialogue with the EU regarding tax governance or have not fulfilled their commitments to enact necessary reforms. They must also have identified tax governance shortcomings.
Q: How often is the list revised?
A: The list is revised biannually, in February and October, to reflect changes.
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