On 22 February, 2021 the EU Council has revised the list of non-cooperative jurisdictions in the tax area once more. Barbados has been de-listed and Dominica was listed.
The current version of the EU “blacklist” includes the following jurisdictions:
- American Samoa
- Trinidad and Tobago
- US Virgin Islands
As it was stated in Council’s conclusions, Dominica did not obtain the necessary rating of compliance with tax transparency and exchange of information standards in the classification of the OECD Global Forum and, as a consequence, was listed. Barbados has managed to obtain such a rating, so it has been moved from the “blacklist” to the “grey list”.
Apart from Barbados, Jamaica has been added to the “grey list”. The decision on Jamaica has been adopted by the EU Council based on the existence of a harmful tax regime in this jurisdiction, however to be abolished legislatively by 31 December, 2022 as per Jamaica’s commitment.
Upon elimination of non-compliance with tax transparency and exchange of information standards Namibia, Morocco and Saint Lucia were removed from the “grey list”. Thus, the EU “grey list” currently includes Australia, Barbados, Botswana, Eswatini, Jamaica, Jordan, Maldives, Thailand and Turkey.
It is necessary to consider that the EU Council does not oblige the EU Member States to implement measures against residents of jurisdictions that were put into the “grey list”. On the contrary, starting from 2021, EU Member States committed to apply at least one of the following tax measures to residents of blacklisted jurisdictions:
- non-deductibility of costs incurred in listed jurisdictions;
- controlled foreign company rules to limit artificial deferral of tax to offshore and low-taxed entities;
- withholding tax measures;
- limitation of the participation exemption on shareholder’s dividends.
Also, EU Member States committed to apply at least one of the following administrative measures to persons resident in blacklisted jurisdictions:
- reinforced monitoring of transactions;
- increased risk audits for taxpayers who benefit from listed regimes;
- increased risk audits for taxpayers who use tax schemes involving listed regimes.
The next revision of the “blacklist” and the “grey list” is planned for October, 2021.