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EU blacklist

The "EU Black List" is a list of jurisdictions that do not meet international standards of tax transparency and fair taxation. Being on this list has serious implications for the jurisdictions that are on it.

The list of jurisdictions included in the EU blacklist is prepared by the EU Commission based on the recommendations of the OECD Global Forum on Transparency and Exchange of Tax Information. This list includes countries that do not cooperate in matters of fair taxation. The list is dynamic and updated every year.

A jurisdiction placed on the EU blacklist may be removed from it if it makes the necessary changes to its tax laws and practices. For this, the country must provide evidence that it meets international standards of tax transparency and fair taxation. After the country has achieved tax fairness and transparency in its national legislation, i.e. eliminated all identified deficiencies, it is excluded from the EU offshore list.

Criteria for inclusion in the EU blacklist

A jurisdiction may be included in the EU blacklist if it meets one or more of the following criteria:

  • does not have an effective exchange of information on tax issues with the EU;
  • does not implement the OECD minimum standards for countering base erosion and tax profit avoidance (BEPS);
  • allows its tax rules to be used to avoid taxation by EU resident companies or individuals;
  • does not follow the rules of transparency of financial reporting and beneficial ownership.

Current list of EU blacklisted jurisdictions or tax havens:

  1. American Samoa
  2. Anguilla
  3. Bahamas
  4. British Virgin Islands
  5. Costa Rica
  6. Fiji
  7. Guam
  8. Marshall Islands
  9. Palau
  10. Panama
  11. Russia
  12. Samoa
  13. Trinidad and Tobago
  14. Turks and Caicos Islands
  15. US Virgin Islands
  16. Vanuatu

Note that this list is current and we monitor any changes in it.

Consequences of being on the EU blacklist

Being on the EU blacklist has serious consequences for the jurisdictions that are on it. These consequences include:

  • An increase in the tax burden on EU residents who conduct transactions with blacklisted jurisdictions.
  • Measures to restrict access of EU residents to the markets of blacklisted jurisdictions.
  • Measures to strengthen controls over cross-border transactions with blacklisted jurisdictions.
  • Strengthened tax and financial control of all transactions with offshore companies.
  • Increased attention of tax authorities to the activities of companies registered in EU-blacklisted countries.
  • Enhanced bank compliance, as offshore business automatically becomes risky.
  • The inability of offshore companies to receive tax preferences in the EU and investment from EU residents.

If you are interested in consulting on issues related to offshore lists and the consequences of doing business with such countries, contact our specialists. We will provide recommendations on how to better cooperate with offshore companies and how to minimize reputational risks.

 

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