EU: Updated “blacklist” of non-cooperative jurisdictions

The European Union as of 18 February 2020 added four jurisdictions—the Cayman Islands, Palau, Panama and Seychelles—to the EU list of non-cooperative jurisdictions, the “blacklist.”

Therefore, the current EU blacklist is composed of 12 jurisdictions: American Samoa, the Cayman Islands, Fiji, Guam, Oman, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the U.S. Virgin Islands and Vanuatu.

In total, 19 jurisdictions were removed from the grey list of non-cooperative jurisdictions since it was last published in December 2019. While three of the jurisdictions (the Cayman Islands, Palau, and Seychelles) were added to the blacklist, 16 jurisdictions—Antigua and Barbuda, Armenia, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cabo Verde, Cook Islands, Curacao, Marshall Islands, Montenegro, Nauru, Niue, Saint Kitts and Nevis, and Vietnam—were found to have fulfilled their commitments within the 2019 deadline and were removed from the grey list.

Read a February 2020 report prepared by KPMG’s EU Tax Centre

Effects of EU blacklist of “tax haven” jurisdictions

The EU blacklist has implications for jurisdictions including sanctions. First, the EU list is linked to EU funding; funds from certain programs cannot be channeled through entities in listed countries.

Second, there is a direct link to the EU list with regard to EU transparency requirements for intermediaries (for instance, a tax scheme routed through an EU listed country will be automatically reportable to tax authorities).  Further, EU Member States have agreed on sanctions to apply at the national level against the listed jurisdictions. These include measures such as increased monitoring and audits, withholding taxes, special documentation requirements and anti-abuse provisions. Read an EC release (March 2019).

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