The EU’s latest list of non-cooperative tax jurisdictions

By Francesca Amaddeo, Researcher, Tax Law Competence Centre (SUPSI), Manno, Switzerland

On 6 October, the EU Commission released its updated list of non-cooperative jurisdictions in taxation.

Antilla and Barbados are in; Oman and Cayman Island are finally out.

Over the years, tax cooperation has arisen as a primary goal of the international tax community, especially the EU.

The EU has played a key role in the implementation of international tax standards, guiding jurisdictions all over the world toward fairness.

De facto, such a list is not binding and has little legal worth. Despite this, it has the power to grant a red or green light to countries. It is worth noting that the ultimate aim is not to “name and shame countries,” but to encourage changes in their tax system through cooperation.

Cayman Islands are now in line with international tax standards

The Cayman Islands, which has always be seen as one of the world’s top tax havens, has finally been de-listed.

In July 2019, the OECD’s Forum on Harmful Tax Practices assessed the Cayman’s regime as not harmful. However, the EU asked the Caymans to introduce proper measures relating to economic substance for collective investment vehicles.

So, the Cayman Islands enhanced its legislation on collective investment funds, as positively evaluated by the Code of Conduct Group.

“Cayman responded positively by expanding the scope of our funds regime to ensure that the Cayman Islands Monetary Authority, our financial services regulator, has the legal mandate to supervise all Cayman-based investment funds,” Hon. Alfen McLaughlin, Cayman’s premier, said.

Even the grey list, encompassing those jurisdictions that do not yet comply with all international tax standards, but have committed to reform, has been updated. Mongolia and Bosnia and Herzegovina have been de-listed since they deposited their instruments of ratification of the OECD Convention on Mutual Administrative Assistance in Tax Matters.

Twelve countries are still on the list

Still on the list of non-cooperative jurisdictions are American Samoa, Anguilla, Barbados, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, US Virgin Islands, Vanuatu, Seychelles.

These countries still show some evidence of abusive tax practices.

Tax fraud, tax evasion, tax avoidance, and money laundering are the crucial issues.

Since the scenario is uncertain due to the effects of the COVID-19 pandemic, the EU Commission has granted an extension of the deadline granted to jurisdictions under exam.

There is still a lot of work to be done, but it is worth it!

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Francesca Amaddeo

Lecturer-researcher at Tax Law Competence Centre, Department of Business Economics, Health and Social Care, University of Applied Science and Arts of Southern Switzerland (SUPSI)

Dr. Francesca Amaddeo, PhD in European law and national legal systems, is an Italian lawyer that works as Lecturer-researcher at the Tax Law Competence Centre, Department of Business Economics, Health and Social Care, University of Applied Science and Arts of Southern Switzerland (SUPSI).

Latest posts by Francesca Amaddeo (see all)

• International taxation: two-pillar plan and the OECD mainstream - February 28, 2022
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• EU Commission seeks to ease withholding tax mechanism on cross-border investments - October 26, 2021
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• Switzerland advances withholding tax reform - May 17, 2021

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