On 5 December 2017, the EU published a “black list” of non-cooperative jurisdictions in taxation matters. It also agreed on ‘defensive’ measures which the EU and its member states could apply to the listed jurisdictions. These measures are aimed at preventing the erosion of the EU member states’ tax bases (for example, non-deductibility of costs, withholding tax measures, reversal of burdens of proof in tax enquiries to the taxpayer, and special documentation requirements).
The non-cooperative tax jurisdictions are: American Samoa, Bahrain, Barbados, Grenada, Guam, South Korea, Macao SAR, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and the United Arab Emirates.
In addition, certain common fund jurisdictions (including most of the UK Overseas Territories and Crown Dependencies – Cayman Islands, Guernsey, Isle of Man, Jersey, Bermuda) are on a “grey list” (meaning they will be closely monitored by the EU) and have made commitments to cooperate with the EU. In particular they must, by the end of 2018, satisfy the EU that their tax regime is not designed to facilitate shifting profits from high tax jurisdictions to entities in low tax jurisdictions where those entities have no real economic substance or do not carry on real economic activities.
The EU will regularly review and update the list in the years to come.