EU Council Updates Non-Cooperative Tax Jurisdiction Lists: Shifts Blacklist Countries to Grey, Acknowledges Reform Progress

On February 20, 2024, the European Union Council made significant updates to its list of non-cooperative jurisdictions for tax purposes, signaling a shift in the status of several countries. Notably, the Council removed the Bahamas, Belize, Seychelles, and Turks and Caicos Islands from the blacklist of non-cooperative jurisdictions, instead placing them on the grey list. This move reflects efforts to enhance their legal frameworks and address identified issues.

The revised EU list now comprises 12 jurisdictions, including American Samoa, Anguilla, Antigua and Barbuda, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, the US Virgin Islands, and Vanuatu. These countries have either failed to engage constructively with the EU on tax governance or have not followed through on commitments to implement necessary reforms. The reforms are aimed at ensuring compliance with tax transparency, fair taxation, and international standards to prevent tax base erosion and profit shifting.

The EU finance ministers oversee the biannual updates to the list, typically occurring in February and October, to monitor developments in tax governance. The removal of the aforementioned countries from the blacklist underscores the EU's commitment to encouraging jurisdictions to improve their tax practices and adhere to agreed-upon standards.

In addition to the adjustments to the blacklist and grey list, the Council approved ongoing cooperation with international partners committed to tax governance reform. Albania and Hong Kong, for instance, fulfilled their commitments by amending harmful tax regimes, resulting in their removal from the state of play document. Similarly, Aruba and Israel met their pending commitments related to the automatic exchange of financial account information under the common reporting standard.

Looking ahead, the next revision of the EU list of non-cooperative tax jurisdictions is scheduled for October 2024, providing an opportunity to assess further progress and developments in tax governance reforms.

By fLEXI tEAM