The European Union has removed several Caribbean countries from its list of non-cooperative jurisdictions for tax purposes.
The EU list of non-cooperative jurisdictions for tax purposes was established in December 2017. It is part of the EU’s external strategy on taxation and aims to contribute to ongoing efforts to promote tax good governance worldwide.
Jurisdictions are assessed on the basis of a set of criteria laid down by the Council.
These criteria cover tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting.
The EU said while the Bahamas, Belize, and the Turks and Caicos Islands have been removed, Anguilla, Antigua and Barbuda, and Trinidad and Tobago remain on the list.
“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 EU said in a statement.
“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 EU said that those reforms should aim to comply with a set of objective tax good governance criteria, which include tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting.
The EU list is updated twice a year to keep track of developments, usually in February and October, under the auspices of the EU finance ministers.
Concerning the Bahamas and Turks and Caicos Islands, the EU said ever since October 2022, deficiencies in the enforcement of economic substance requirements had been identified in both of these jurisdictions by the Organisation for Economic Co-operation and Development (OECD) Forum of Harmful Tax Practices (FHTP).
In the FHTP’s most recent assessment, the recommendations to both jurisdictions to remedy these deficiencies were converted from “hard” to “soft” recommendations, which allowed the Code of Conduct Group to consider these jurisdictions compliant with the standard for jurisdictions with no or only a nominal corporate income tax, the EU said.
In October last year, Belize and Seychelles were included in the EU list of non-cooperative jurisdictions for tax purposes after a negative assessment from the OECD Global Forum with regard to exchange of information on request.
The EU said that following changes to the applicable rules in these jurisdictions, the Global Forum has granted them both a supplementary review, which will be undertaken in the near future. It said pending the outcome of this review, Belize and Seychelles have been included in the relevant section of Annex II.
In addition to the list of non-cooperative tax jurisdictions, the EU Council approved the usual state of play document (Annex II) which 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.
The Global Forum gave Botswana and Dominica positive ratings with regard to the exchange of information on request, resulting in the deletion of the reference to these jurisdictions in the relevant section.
BRUSSELS, Feb 21, CMC
CMC/af/ir/2024
