As published on step.org/industry-news, Monday 28 February, 2022.
EU Member States’ finance ministers have adopted a revised list of non-cooperative jurisdictions for tax purposes, following recommendations by the EU Code of Conduct Group (Business Taxation)(the CCG).
The blacklist of nine non-compliant countries remains unchanged; however, ten jurisdictions have been added to the Annex II 'grey list' of jurisdictions that have not yet met all the CCG’s criteria and remain under close review.
The ten jurisdictions, which have committed to complying with the CCG’s definition of tax cooperation, are the Bahamas, Belize, Bermuda, the British Virgin Islands (BVI), Israel, Montserrat, Russia, Tunisia, Turks and Caicos and Vietnam. The list also includes Anguilla, Barbados, Botswana, Costa Rica, Dominica, Hong Kong, Jamaica, Jordan, Malaysia, North Macedonia, Qatar, Seychelles, Thailand, Turkey and Uruguay.
According to the CCG report, there are various issues that still need to be addressed by grey-listed jurisdictions.
It recommends that the Bahamas, Bermuda and Turks and Caicos focus on the implementation of economic substance legislation. Along with Belize, the BVI, Israel, Montserrat, Tunisia and Vietnam, the Bahamas has also been asked to implement the OECD domestic country-by-country Reporting minimum standard. The CCG notes that Costa Rica, Hong Kong, Malaysia, Qatar and Uruguay should modify or abolish any foreign-source income regimes. Russia has been told to reform its international holding companies regime.
No direct penalties or sanctions will be imposed by any EU Member States on entities or institutions in listed jurisdictions as a result of their inclusion in Annex II, according to law firms Walkers and Harneys.
The next update of the lists is due at a meeting of the EU Council in October 2022.