Last month, we informed you about the adoption by the European Union finance ministers of the first-ever blacklist of tax havens. It named 17 jurisdictions outside the EU as non-cooperative on tax matters.
On 23 January 2018, the finance ministers agreed to remove eight jurisdictions from the list, following commitment letters by these jurisdictions to change their tax rules. The removal means they are now part of a “gray” list of countries that are currently not compliant with EU standards but expected to become so.
The Code of Conduct Group for Business Taxation, made up of representatives from Member States, will monitor implementation of the commitments. Despite demands from the European Commission, the content of the commitment letters has not been disclosed publicly. Nine jurisdictions remain on non-cooperative list: American Samoa, Bahrain, Guam, Marshall Islands, Namibia, Palau, Saint Lucia, Samoa and Trinidad and Tobago.
In June 2017 ahead of a G20 summit, the OECD was listing only one remaining jurisdiction as non-cooperative, Trinidad and Tobago, but under different criteria. Whereas the OECD is focusing its effort on improving international tax transparency standards for the exchange of information (automatic and on request), the EU considers additionally that preferential tax regimes and the absence of corporate income tax (or a zero corporate tax rate) are risk indicators.
The OECD has a different scope of action, playing a role of global coordinator and leaving members to implement OECD standards into national law. By contrast, the EU is acting as a normative power with binding implications for its Member States and eventually businesses.