Four jurisdictions removed from EU’s 'non-cooperative' list

Thursday, 22 February 2024
The Council of Ministers of the European Union (the EU Council) has removed the Bahamas, Belize, Seychelles and the Turks and Caicos Islands from its list of jurisdictions classed as non-cooperative for tax purposes.

The so-called Annex I list includes countries that the EU considers to have either refused to meet EU demands on their tax governance or have failed to deliver on their commitments to implement the required reforms. A further list, Annex II, contains jurisdictions that have committed to reforms but have not yet completed them.

The Bahamas and the Turks and Caicos Islands were both on Annex I because the OECD Forum of Harmful Tax Practices (FHTP) decided they were not properly enforcing the economic substance rules. These rules state that companies resident in a low-tax jurisdiction must have a significant business presence. The Bahamas in particular had problems with the online portal it developed to exchange information, which were eventually remedied in December 2023.

The FHTP has since decided that the two jurisdictions have remedied these deficiencies so successfully that they can be declared fully compliant with the rules. Accordingly, both have been fully delisted by the EU.

The EU has also removed Belize and Seychelles from the Annex I list and placed them on the Annex II list. They had been placed on Annex I when the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) took a negative view of their record regarding exchange of tax information on request. They have now changed the relevant rules and the Global Forum has granted them both a supplementary review. The outcome of this review will determine whether Belize and Seychelles will also be fully delisted.

The EU has also removed Albania, Aruba, Botswana, Dominica, Hong Kong and Israel from the Annex II list. In addition to Belize and Seychelles, that list now comprises Armenia, the British Virgin Islands, Costa Rica, Curacao, Eswatini, Malaysia, Turkey and Vietnam.

Twelve jurisdictions remain on the Annex I list: American Samoa, Anguilla, Antigua and Barbuda, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, the US Virgin Islands and Vanuatu.

The next revision of the lists is scheduled for October 2024. For the first time, it will check jurisdictions' performance on a new criterion on exchanging beneficial ownership information.


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