The European Union (EU) Tax Haven Blacklist is a tool that lists tax-havens. The EU list of non-cooperative jurisdictions for tax purposes is an instrument used to tackle issues on tax fraud, tax evasion, tax avoidance and money laundering. Over time, the list is studied and modernised; the list includes listing and delisting jurisdiction as they partake in reforms, screening and engaging with countries that do not comply with the standards set and institutional standards in conformity with international tax standards.
The latest revision of the list was done on 22 February 2021. Members of the European Union met and called for tightening of the standards by which countries are added or removed from the blacklist. Members of the EU, however, emphasised the need to screen Britain’s overseas territories like the Cayman Islands, Bahamas, Jersey and Guernsey for potential inclusion on the tax haven blacklist. They referred to the fact that the Brexit deal was based on mutual values and geared towards common prosperity, which automatically excludes aggressive tax competition.
Members also agreed to remove Namibia, Morocco and Saint Lucia from the list and then add Barbados and Jamaica. They have been devoted to either amend or abolish their harmful tax regime and have been given till December 31, 2022, to adapt their legislation. They also agreed to extend the deadline for Australia and Jordan to 31 December 2021 to amend their tax regimes which were identified as harmful. Barbados was moved to the grey list, pending a supplementary review by the Global Forum.
Now twelve jurisdictions comprising Seychelles, Trinidad and Tobago, US Virgin Islands, Vanuatu, Anguilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, and American Samoa are on the EU blacklist. They agreed to add Dominica to the blacklist due to the publication during the Global Forum on Transparency and Exchange of Information for tax purposes in the year 2020. Dominica attained a “partially-compliant” rating during the peer review report, where they were assessed based on compliance with the international standards on transparency and exchange of request information. A country is expected to attain a minimum rating of “largely compliant” by the Global Forum concerning the OECD Exchange of Information on Respect standard per the EU criteria.
However, the most significant update was the issuance of an ultimatum to Turkey to fulfil its tax commitments. The Transparency criteria showed that Turkey had not made material progress in implementing the automatic exchange of information. Consequently, there is the need to make tangible progress under this criterion by December 31, 2021.
EBII Group is committed and opened to working with any jurisdiction committed to meet tax compliance. On the EU tax updates, EBII Group believes that the criterion for judging whether a country’s tax system is fair or not needs to be widened to include more practices and not only preferential tax rates. There should be fairness and transparency in setting the criteria to either be blacklisted or not. All third countries need to be treated and screened relatively using the same criteria. Currently, EBII Group has created financial intelligence platform called the Africa Compliance Hub, which equips persons (individuals, corporate institutions, state organisations) to be well abreast with law, rules and regulations for the smooth running of businesses in Africa. This conforms with international standards and a move to synchronise best practices worldwide to transact business without complications.
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