Belize's Reputation Hit: Blacklisted by EU
The Council of the EU has made significant decisions regarding the EU list of non-cooperative jurisdictions for tax purposes. Today, Antigua and Barbuda, Belize, and Seychelles were added to the list while the British Virgin Islands, Costa Rica, and Marshall Islands were removed. This brings the total number of jurisdictions on the list to 16.
The Council expresses its disappointment that these jurisdictions have not shown cooperation on tax matters and urges them to enhance their legal frameworks to address identified issues.
EU List Criteria and Tax Governance
The EU list of non-cooperative tax jurisdictions, known as Annex I, comprises countries that have either not engaged in constructive dialogue with the EU regarding tax governance or have failed to fulfill their commitments to implement necessary reforms. These reforms should align with specific tax good governance criteria, including tax transparency, fair taxation, and adherence to international standards aimed at preventing tax base erosion and profit shifting.
Collaboration for Tax Good Governance
The code of conduct group for business taxation, responsible for updating the list, collaborates closely with international bodies like the OECD Forum on Harmful Tax Practices (FHTP) to promote tax good governance globally.
Latest Updates and Removals
In this latest update, the Council added Antigua and Barbuda, Belize, and Seychelles to the list due to deficiencies in the exchange of tax information upon request. Conversely, the British Virgin Islands was removed from the list as it amended its framework on information exchange and will undergo reassessment according to OECD standards. Costa Rica was delisted because it addressed harmful aspects of its foreign source income exemption regime, while Marshall Islands made significant progress in enforcing economic substance requirements.
State of Play and Cooperation
Additionally, the Council approved the state of play document (Annex II), highlighting ongoing EU cooperation with international partners and recognizing commitments by countries to reform their legislation in line with tax good governance standards. Four jurisdictions were removed from this document as Jordan and Qatar amended harmful tax regimes, and Montserrat and Thailand fulfilled pending commitments related to country-by-country reporting of taxes paid.
EU's Taxation Strategy
Established in December 2017, the EU list of non-cooperative jurisdictions for tax purposes forms part of the EU's external taxation strategy and aims to support global tax good governance initiatives. Jurisdictions undergo assessment based on criteria set by the Council, covering tax transparency, fair taxation, and adherence to international standards to prevent tax evasion and profit shifting.
Monitoring and Updates
The code of conduct group, responsible for monitoring tax measures in EU member states, prepares the Council's decisions regarding the list. Updates to the list occur biannually since 2020, with the next revision scheduled for February 2024.
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