Tax alert – EU Black-list as adopted on 14 February 2023

TAX NEWSLETTER – MARCH 2023

EU LIST OF NON-COOPERATIVE JURISDICTIONS FOR TAX PURPOSES WAS UPDATED TO INCLUDE BRITISH VIRGIN ISLANDS, COSTA RICA, MARSHALL ISLANDS AND RUSSIA

The EU list of non-cooperative jurisdictions for tax purposes is issued as part of the EU’s to strengthen tax good governance mechanisms, fair taxation and global tax transparency and to work against tax fraud, evasion and avoidance both within the EU as well as at the international level.

The aim of the EU list of non-cooperative jurisdictions, the so called “blacklist”, which is published as an annex to conclusions adopted by the Ecofin Council (Annex I), is not to name and shame jurisdictions, but to encourage positive change in their tax legislation and practices through cooperation. Jurisdictions enlisted in the above Annex are those which have failed to fulfil their commitments to comply with tax good governance criteria as prescribed within a specific timeframe, and countries which have refused to engage with the EU on this matter.

Jurisdictions that do not yet comply with all international tax standards but have committed to implementing reforms are included in a state of play document (Annex II), the so called “greylist”.

EU list of non-cooperative jurisdictions, Annex I:

The Annex I, as adopted on 14 February 2023, which includes the additions of British Virgin Islands, Costa Rica, Marshal Islands and Russia, is comprised of the below 16 jurisdictions:

EU list of non-cooperative jurisdictions, Annex II:

The Annex II, as adopted on 14 February 2023, after the removal of Barbados, Jamaica, North Macedonia and Uruguay which have fulfilled their commitments is comprised of the below 18 jurisdictions:

General Remarks:

As of 2020, the list is updated twice a year, to allow the EU member states sufficient time to amend domestic legislation where needed. The next revision is due in October 2023.

Further to the above developments, taxpayers are encouraged to assess the impact of their transactions with persons, individuals and entities, which are established in the above jurisdictions, including, but not limited to, the provisions of the law in relation to the EU Directive on cross-border arrangements (DAC6) and the amendments of the Income Tax Law and Special Defence Contribution Law for the prevention of tax abuse and which provide for Withholding tax obligations, effective from 31 December 2022.

Our team of experts remains at your disposal for assistance in the assessment of the tax implications arising as a result of the above.