EU list of Non-Cooperative Tax Jurisdictions – Tax Havens

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14 February 2023 the Council of the European Union published an updated list of non-cooperative tax jurisdictions. The British Virgin Islands, Costa Rica, the Marshall Islands and Russia have been added to the list, which now comprises 16 jurisdictions:

American Samoa
Anguilla
Bahamas
British Virgin Islands
Costa Rica
Fiji
Guam
Marshall Islands
Palau
Panama
Russia
Samoa
Trinidad and Tobago
Turks and Caicos Islands
US Virgin Islands
Vanuatu

This revised EU list of non-cooperative tax jurisdictions includes countries that either have not engaged in a constructive dialogue with the EU on tax governance or have failed to deliver on their commitments to implement the necessary reforms. Those reforms should aim to comply with a set of objective tax good governance criteria, which include tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting.

For the Marshall Islands, there are concerns that this jurisdiction which has a zero or only nominal rate of corporate income tax is attracting profits without real economic activity (criterion 2.2 of the EU list). In particular, the Marshall Islands were found to be lacking in the enforcement of economic substance requirements. The Marshall Islands have been listed already once, in 2018.

British Virgin Islands are listed because they were found not to be sufficiently in compliance with the OECD standard on exchange of information on request (criterion 1.2). This is the first time this jurisdiction is listed.

For the first time since the list was established, Costa Rica is included because it has not fulfilled its commitment to abolish or amend the harmful aspects of its foreign source income exemption regime (criterion 2.1).

Russia is listed after the code of conduct group screened Russia’s new legislation adopted in 2022 against the good tax governance criteria of the code and found that Russia had not fulfilled its commitment to address the harmful aspects of a special regime for international holding companies (criterion 2.1). In addition, dialogue with Russia on matters related to taxation came to a standstill following the Russian aggression against Ukraine.

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