Three countries have been removed from the EU's blacklist of non-cooperative jurisdictions.
As a result, Bahrain, the Marshall Islands and Saint Lucia will not face EU defensive measures such as sanctions and limited access to EU funding. These countries have pledged to reform their systems in order to align them with conditions stipulated by the EU. However, they will now be on a so-called "grey list" and subject to close monitoring.
The Bahamas, Saint Kitts and U.S. Virgin Islands have been added to the blacklist because they failed to make appropriate commitments in response to all of the EU's concerns. As a result, the EU's blacklist now includes the following countries:
The EU's blacklist of non-cooperative tax jurisdictions was originally released in December 2017. At that time, the list included 17 countries identified as failing to meet agreed good tax-governance standards, following letters sent to certain jurisdictions requesting commitments to address deficiencies identified by the EU. The list, which looks at non-EU countries who trade economically with the EU, replaces the former patchwork of national lists. The list may be revised at least once a year, and was last revised in January to remove eight countries from the blacklist.
EU taxpayers dealing with entities from countries on the blacklist may experience a greater likelihood of being audited and monitored by their local EU tax jurisdiction-including taxpayers who use structures or arrangements involving blacklisted jurisdictions. According to the European Commission (EC), multinationals that have a presence in blacklisted jurisdictions may also face stricter reporting requirements or face limitations in their access to EU funding, among other potential measures that specific EU Member States may take.
EC continues to monitor progress
The EU Council is currently monitoring the implementation of commitments by Anguilla, Antigua and Barbuda, the British Virgin Islands, and Dominica. The EU Council is also seeking a commitment by the Turks and Caicos Islands by March 31, 2018.
For more information, contact your KPMG adviser.
Information is current to March 20, 2018. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500