Amendments to the EU’s List of Non-Cooperative Jurisdictions in Matters of Taxation

On 13 March 2018, the Council of the EU published its latest amendments to its list of non-cooperative jurisdictions in matters of taxation. Changes include the removal of Bahrain, the Marshall Islands and Saint Lucia, and the addition of the Bahamas, Saint Kitts and Nevis, and the US Virgin Islands.

These changes were made in the light of commitments made by listed jurisdictions and an assessment of jurisdictions for which no listing decision had yet been taken. Bahrain, the Marshall Islands and Saint Lucia were removed because they made specific commitments to tackle and remedy EU concerns. These commitments were judged sufficiently reliable to warrant the removal of these three jurisdictions from this list. Tax advisors working in these jurisdictions will now be able to offer their clients services that are in conformity with the EU’s policies and practices.

However, the Bahamas, Saint Kitts and Nevis, and the US Virgin Islands were added to the list since, in spite of letters requesting commitments to settle EU concerns, no commitment to do was forthcoming from these jurisdictions.

There are currently nine jurisdictions on this list. Apart from the Bahamas, Saint Kitts and Nevis, and the US Virgin Islands, the other six non-cooperative jurisdictions are American Samoa, Guam, Namibia, Palau, Samoa, and Trinidad and Tobago. The EU is concerned that lax regulation in these jurisdictions may offer scope for tax planning schemes deleterious to the EU’s member states.

The EU’s list of non-cooperative jurisdictions is intended to promote good governance in taxation, and minimise the potential for crime and fraud related to tax, as well as tax avoidance of all sorts. The EU encourages jurisdictions on the list to tackle its concerns and make the changes requested of them since, without such changes, their practices may lead to loss of revenues for the EU’s member states. The EU does not exclude taking defensive measures against jurisdictions on this list unless at least commitments to tackle the EU’s concerns are forthcoming.

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