News Americas, NEW YORK, NY, Mon. Feb. 26, 2024: The European Union has updated its list of non-cooperative jurisdictions for tax purposes, removing several Caribbean nations from its so-called Blacklist.
The European blacklist, created in 2017 in the wake of scandals such as the Panama Papers and LuxLeaks, is meant to encourage other countries and jurisdictions to “adopt fair tax policies” and “increase tax transparency.”
The EU announced that these three Caribbean countries are now off its “Blacklist.” They are:
1: The Bahamas
2: Belize
3: The Turks and Caicos Islands.
Those still under scrutiny for their tax governance practices are:
1: Anguilla
2: Antigua and Barbuda
3: Trinidad and Tobago
4: US Virgin Islands
The EU encourages these jurisdictions to amend their legal frameworks to address identified tax governance shortcomings. Included in the list are countries that have either not participated in constructive dialogue with the EU regarding tax governance or have not fulfilled their commitments to enact necessary reforms. These reforms are expected to align with the EU’s objective criteria for tax governance, which emphasize tax transparency, fair taxation, and the prevention of tax base erosion and profit shifting.
The list is revised biannually, in February and October, to reflect changes and is overseen by EU finance ministers. Notably, recent assessments by the Organisation for Economic Co-operation and Development (OECD) Forum of Harmful Tax Practices (FHTP) identified issues in the Bahamas and Turks and Caicos Islands related to enforcing economic substance requirements. However, subsequent recommendations were softened, leading to their compliance with standards for jurisdictions with minimal corporate income tax.
Additionally, Belize and Seychelles were previously flagged by the OECD Global Forum for deficiencies in information exchange but have since implemented rule changes that warrant further review. Meanwhile, Botswana and Dominica received positive evaluations for their information exchange practices, leading to their removal from the list.
