EU puts 15 countries on blacklist for non-cooperation on tax

EU finance ministers have updated the EU list of non-cooperative tax jurisdictions and have named 15 countries on a blacklist for failing to follow up on commitments to comply with international standards

The latest update shows 60 countries took action on the Commission's concerns and over 100 harmful regimes were eliminated.

However, 15 countries have been blacklisted. Of those, five have taken no commitments since the first blacklist published in 2017: American Samoa, Guam, Samoa, Trinidad and Tobago, and US Virgin Islands.

The following countries are back on the blacklist after failing to take agreed actions: Barbados, United Arab Emirates and Marshall Islands, Aruba, Belize, Bermuda, Fiji, Oman, Vanuatu and Dominica.

Another 34 countries are on the so-called grey list and will continue to be monitored in 2019, while 25 countries are no longer seen as potential tax risk jurisdictions.

Pierre Moscovici, commissioner for economic and financial affairs, taxation and customs, said: ‘Thanks to the listing process, dozens of countries have abolished harmful tax regimes and have come into line with international standards on transparency and fair taxation. The countries that did not comply have been blacklisted and will have to face the consequences that this brings. We are raising the bar of tax good governance globally and cutting out the opportunities for tax abuse.’

The EU said its screening will now be enhanced with more compulsory transparency criteria to be respected and three G20 countries will added to the next assessments: Russia, Mexico, and Argentina.

In terms of consequences, member states have agreed on a set of countermeasures, which they can choose to apply against the listed countries, including increased monitoring and audits, withholding taxes, special documentation requirements and anti-abuse provisions.

A letter will now be sent to all jurisdictions on the EU list, explaining the decision and what they can do to be de-listed.

Over the course of last year, the Commission assessed 92 countries based on three criteria: tax transparency, good governance and real economic activity, as well as one indicator, the existence of a zero corporate tax rate.

The Commission and Member States (Code of Conduct Group) will continue to monitor the jurisdictions that have until the end of 2019/2020 to deliver and assess whether any other countries should be included in the EU listing process.

Common EU list of third country jurisdictions for tax purposes is here.

Report by Pat Sweet, Sara White

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