On 20 February 2024, the Council of the European Union made a significant decision to remove Bahamas, Belize, Seychelles, and Turks and Caicos Islands from the list of non-cooperative jurisdictions for tax purposes. This update brings the EU list to comprise 12 jurisdictions and reflects ongoing efforts to promote tax good governance worldwide.
The EU list of non-cooperative jurisdictions for tax purposes, established in December 2017, forms a crucial part of the EU’s external strategy on taxation. It aims to contribute to ongoing efforts to promote tax good governance worldwide. The Council’s decisions are prepared by the Council’s Code of Conduct Group, which cooperates closely with international bodies such as the OECD Forum on Harmful Tax Practices (FHTP) to achieve these goals.
The next revision of the list is scheduled for October 2024.
Reasons for Removal from the EU List:
- Bahamas and Turks and Caicos Islands: Identified deficiencies in the enforcement of economic substance requirements led to their inclusion in October 2022. However, both jurisdictions have made significant progress, and their recommendations have been converted from “hard” to “soft” by the OECD Forum of Harmful Tax Practices (FHTP). This has 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.
- Belize and Seychelles: Added to the list in October 2023 due to concerns regarding the 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. Pending the outcome of this review, Belize and Seychelles have been included in the relevant section of Annex II (more information below).
State of Play Document (Annex II):
In addition to the list of non-cooperative tax jurisdictions, the Council has endorsed the customary status update document (Annex II), which mirrors the continuous collaboration between the EU and its global counterparts. This document highlights the commitment of these nations to reform their legal frameworks to align with established tax governance standards. Its aim is to acknowledge the ongoing productive efforts in the realm of taxation and to commend the proactive stance adopted by cooperative jurisdictions in implementing principles of tax governance.
Removed from the State of Pay List:
– Albania and Hong Kong: Having amended their harmful tax regimes, these jurisdictions will be removed from the document.
– Aruba and Israel: Fulfilling pending commitments related to automatic exchange of financial account information.
– Botswana and Dominica: Received positive ratings from the Global Forum, resulting in the deletion of references to these jurisdictions.