The EU is adding to its list of non-cooperative jurisdictions

The latest additions comprise Anguilla, the Bahamas, and Turks and Caicos Islands adding to those already on the blacklist of tax-havens.

All three Caribbean countries are being added to the list because they facilitate “offshore structures and arrangements aimed at attracting profits without real economic substance by failing to take all necessary actions to ensure the effective implementation of substance requirements under criterion 2.2”

The EU laid out the decision in draft on 26 September and was rubber-stamped by EU finance ministers on 5 October.

9 countries that were already designated non-cooperative are staying on the register.  These are: American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the US Virgin Islands, and Vanuatu and whose failings mostly relate automatic exchange of financial information or failing to be “Largely Compliant” with the Global Forum on Transparency and Exchange of Information for Tax Purposes.

The direct consequences of blacklisting are various sanctions by EU member countries, including applying withholding taxes at a higher rate on payments received in blacklisted jurisdictions. This serves as a disincentive for EU companies to invest in blacklisted countries. Blacklisting also carries reputational risks and may affect the ability of these countries to access funds from international development lenders.

The blacklist sits alongside the grey list of a further 25 jurisdictions that are on a watch list of those jurisdictions that are being monitored for compliance, not having achieved compliance yet, but are seen to be working towards it.

Jersey is a cooperating and compliant jurisdiction.