Removal of eight jurisdictions from the EU list of non-cooperative jurisdictions for tax purposes
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Removal of eight jurisdictions from the EU list of non-cooperative jurisdictions for tax purposes
Removal of eight jurisdictions from the EU list of non-cooperative jurisdictions for tax purposes
Fri 02 Feb 2018
The Council of the European Union (EU) has removed eight jurisdictions from its list of non-cooperative jurisdictions for tax purposes. This follows commitments from these jurisdictions to address the EU’s concerns. The eight jurisdictions have instead been moved to a separate category ‘subject to close monitoring’ and are:
- Barbados, Grenada, the Republic of Korea, Macao SAR, Mongolia, Panama, Tunisia and the United Arab Emirates.
The nine jurisdictions remaining on the list as non-cooperative are:
- American Samoa, Bahrain, Guam, Marshall Islands, Namibia, Palau, Saint Lucia, Samoa and Trinidad and Tobago.
The EU will review the list of non-cooperative jurisdictions annually.
The Council’s announcement sets out the background leading to countries being listed as cooperative or non-cooperative as part of coordinated international efforts to bring about common standards in tax compliance and reduce the effectiveness of tax havens.
Implications
The press release comments that pending the resolution of the deficiencies in a jurisdiction’s tax administration, EU Member States may apply defensive measures against those jurisdictions on the non-cooperative list. This should be borne in mind when considering international business and investment structuring.
HMRC can also levy increased penalties for errors or failure to make returns connected with certain jurisdictions (100% for category 1, 150% for category 2 and 200% for category 3). The categorisation in SI 2011/976 of the eight jurisdictions removed from the EU non-cooperative list is set out below.
| Category 1 | Category 2 | Category 3 |
| South Korea (Republic of Korea) | Barbados | Macau SAR |
| Grenada | Panama | |
| Mongolia | United Arab Emirates | |
| Tunisia |
The categorisation in SI 2011/976 of the nine jurisdictions left on the EU non-cooperative list are as category 2 except for the following which are category three: Marshall Islands, Palau, and Trinidad and Tobago.
To discuss the tax implications of doing business internationally, please get in touch with a member of the Mazars international tax team.
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