Yachts in the sun – Photo by Nick Rickert on Unsplash
(BRUSSELS) – The EU Council decided Tuesday to add Russia, the British Virgin Islands, as well as Costa Rica and Marshall Islands to the EU’s list of non-cooperative jurisdictions for tax purposes.
Russia has been listed after the code of conduct group found it had not fulfilled its commitment to address the harmful aspects of a special regime for international holding companies (criterion 2.1). In addition, dialogue with Russia on matters related to taxation came to a standstill following the Russian aggression against Ukraine.
Also North Macedonia, Barbados, Jamaica and Uruguay have been deemed to have successfully fulfilled their commitments and are removed from the state of play document.
The EU list of non-cooperative tax jurisdictions now consists of 16 jurisdictions: American Samoa; Anguilla; Bahamas; British Virgin Islands; Costa Rica; Fiji; Guam; Marshall Islands; Palau; Panama; Russia; Samoa; Trinidad and Tobago; Turks and Caicos Islands; US Virgin Islands; Vanuatu.
While the jurisdictions are now listed as non-cooperative on tax matters, they are invited to improve their legal framework in order to resolve the identified issues.
This revised list (Annex I) 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. 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 code of conduct group, the EU Council body which prepares the updates of the list, is cooperating closely with international bodies such as the FHTP to promote tax good governance worldwide.
For the Marshall Islands, there are concerns that this jurisdiction which has a zero or only nominal rate of corporate income tax is attracting profits without real economic activity (criterion 2.2 of the EU list). In particular, the Marshall Islands were found to be lacking in the enforcement of economic substance requirements. The Marshall Islands have been listed already once, in 2018. British Virgin Islands are listed because they were found not to be sufficiently in compliance with the OECD standard on exchange of information on request (criterion 1.2). This is the first time this jurisdiction is listed.
For the first time since the list was established, Costa Rica is included because it has not fulfilled its commitment to abolish or amend the harmful aspects of its foreign source income exemption regime (criterion 2.1).
Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes
EU list of non-cooperative jurisdictions (background information)
