Durrant Pate/Contributor

The Council of the European Union has removed Bahamas, Belize, Seychelles and Turks and Caicos Islands (TCI) from the list of non-cooperative jurisdictions for tax purposes.

Concerning Bahamas and TCI, they have addressed deficiencies in the enforcement of economic substance requirements identified in both of these jurisdictions by the OECD Forum of Harmful Tax Practices (FHTP) from October 2022.

In the FHTP’s most recent assessment, the recommendations for 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 none or only a nominal corporate income tax.

In October 2023, Belize and Seychelles were included on 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. 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.

Case of Belize and Seychelles

Pending the outcome of this review, Belize and Seychelles have been included in the relevant section of Annex II. Two jurisdictions, Albania and Hong Kong, fulfilled their commitments by amending a harmful tax regime and will be removed from the state of play document.

Aruba and Israel also fulfilled all of their pending commitments relating to the automatic exchange of financial account information in the framework of the common reporting standard. 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.

Updated non-compliant list

With the removal of these states, an updated non-compliance list has been published. The updated list consists of the following 12 jurisdictions:

• American Samoa
• Anguilla
• Antigua and Barbuda
• Fiji
• Guam
• Palau
• Panama
• Russia
• Samoa
• Trinidad and Tobago
• US Virgin Islands
• Vanuatu

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. Work on the list is a dynamic process.

Since 2020, the council has updated the list twice a year. The next revision of the list is scheduled for October 2024. The EU list of non-cooperative jurisdictions for tax purposes was established in December 2017, and is part of the EU’s external strategy on taxation, aiming 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.