The first ever European Union (EU) list of non-cooperative tax jurisdictions has been agreed yesterday by the Finance Ministers of EU Member States during their meeting in Brussels.

In total, EU ministers have listed 17 countries for failing to meet agreed tax good governance standards. They include:

  • American Samoa
  • Bahrain
  • Barbados
  • Grenada
  • Guam
  • Republic of Korea
  • Macao
  • Marshall Islands
  • Mongolia
  • Namibia
  • Palau
  • Panama
  • Saint Lucia
  • Samoa
  • Trinidad and Tobago
  • Tunisia
  • United Arab Emirates

In addition, EU ministers have published another list of 47 countries which committed to address deficiencies in their tax systems and meet EU standard.

In a press release, the EU said this unprecedented exercise should raise the level of tax good governance globally and help prevent the large-scale tax abuse exposed in recent scandals such as the “Paradise Papers”.

“The adoption of the first ever EU blacklist of tax havens marks a key victory for transparency and fairness. But the process does not stop here. We must intensify the pressure on listed countries to change their ways,” Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said.

“Blacklisted jurisdictions must face consequences in the form of dissuasive sanctions, while those that have made commitments must follow up on them quickly and credibly. There must be no naivety: promises must be turned into actions. No one must get a free pass.”

For next steps, the EU will send letter to all jurisdictions on the list, explaining the decision and what they can do to be de-listed.

The EU and Member States (in the Code of Conduct Group) will continue to monitor all jurisdictions closely, to ensure that commitments are fulfilled and to determine whether any other countries should be listed in the future. A first interim progress report should be published by mid-2018. The EU list will be updated at least once a year.

Pending changes to be made, the EU and the member states could also apply defensive measures, which include both taxation and non-taxation measures, to prevent the erosion of the EU member states’ tax bases.

However, special consideration will be made for jurisdictions affected by natural disasters. The process will be put on hold temporarily for them.

The European Council conclusions on the list of non-cooperative jurisdictions in taxation matters are available here.

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