Council of the EU adds jurisdictions to the EU list of non-cooperative jurisdictions for tax purposes

Deloitte Malta Tax Alert

16 February 2023

On 14 February 2023, the Council of the EU made additions to the EU list of non-cooperative jurisdictions for tax purposes (‘Annex I’).

British Virgin Islands, Costa Rica, Marshall Islands and Russia have been added to Annex I due to the following stated reasons:

  • British Virgin Islands were found not to be sufficiently in compliance with the OECD standard on exchange of information on request;
  • Costa Rica has not fulfilled its commitment to abolish or amend the harmful aspects of its foreign source income exemption regime;
  • With respect to the Marshall Islands, there are concerns that this jurisdiction is attracting profits without real economic activity;
  • Russia’s new legislation adopted in 2022 has been screened by the code of conduct group against the good tax governance criteria and it has been determined that Russia has not fulfilled its commitment to address the harmful aspects of a special regime for international holding companies. Furthermore, dialogue with Russia on matters related to taxation came to a standstill following the Russian aggression against Ukraine.

Consequently, this update increases the total number of jurisdictions on Annex I to sixteen. Therefore, the full list of countries currently included on the list includes:

  • 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; and
  • Vanuatu.

The first-ever EU list of non-cooperative jurisdictions for tax purposes was adopted by the EU Council on 5 December 2017 and is updated on a biannual basis with the aim of strengthening tax good governance mechanisms, fair taxation, global tax transparency especially in the sphere of beneficial ownership information, and the fight against tax fraud, evasion and avoidance.

The list is an outcome of extensive screening and dialogue processes with non-EU jurisdictions. A number of jurisdictions have taken concrete measures since 2017 and are expected to maintain such commitments on an ongoing basis.

The Council of the EU’s official press release may be accessed here.

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