The EU sets the agenda for COP27 as Ecofin widens the EU blacklist

Three more nations have been added to the EU's tax blacklist, the corporate tax gap in Canada has grown, and Shell's CEO has warned of a future levy on energy companies.

In an effort to put further pressure on governments to adhere to international tax norms, the Economic and Financial Affairs Council has added three more nations to its EU blacklist of non-cooperative tax jurisdictions.

Even if the directive for pillar two was not discussed at the Ecofin meeting on Tuesday, October 4, ministers nonetheless made progress on issues related to the EU's foreign tax policy.

Anguilla, The Bahamas, and Turks & Caicos Islands were added to the Czech Council presidency's list of non-cooperative tax countries for tax reasons. The list contains nations that have not spoken with the EU about tax governance or have not implemented the necessary global tax changes.

American Samoa, Anguilla, The Bahamas, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, Turks and Caicos Islands, US Virgin Islands, and Vanuatu are the 12 jurisdictions left on the list.

To be taken off the list, countries that are undertaking tax reform must satisfy the EU's standards for good governance. Transparency in taxes and the application of global BEPS rules are requirements.

At the same meeting, the EU Council, which is chaired by the Czech Republic, announced its agenda for the UN Climate Change Conference in 2022, including aspirations to join the G7's climate club.

The goal of the climate club is to advance climate action, carbon reductions, and the energy transition while serving as an intergovernmental platform to promote the Paris Agreement.

The Council emphasized its efforts to lower carbon emissions by increasing the price of fossil fuels, notably the Carbon Border Adjustment Mechanism and the Emissions Trading System.

The necessity for new carbon pricing initiatives with other nations to redirect cash flows to climate-neutral projects was emphasized by EU leaders.

The next Ecofin meeting is scheduled for November 8, but due to the intensified political polarization around corporate tax issues, it is doubtful that the topic of minimal taxes would be discussed.

By fLEXI tEAM