EU Blacklist Explained


Posted 3rd April 2018 credit @BVIFinance

The Code of Conduct Group within the European Unions ECOFIN Council, responsible for EU economic and taxation policy, has created a list (or blacklist as it has become known) of non-cooperative jurisdictions for tax purposes. The list, which is part of an overall drive by the EU to combat aggressive tax avoidance, is based on criteria in the following three areas: 1) tax transparency; 2) fair taxation; and 3) commitment to implementing measures agreed by the OECD intended to stop profit shifting, or Base Erosion and Profit Shifting (BEPS).    92 jurisdictions around the world, including large nations such as the US and China, and Crown Dependencies and Overseas Territories like the BVI, were screened in 2017 as part of the process. An initial list was published in December 2017. Due to the damage caused by the September hurricanes, a number of countries, including the BVI, were given until the end of February 2018 to provide information to the Council. The BVI engaged positively with the Council and provided the required information.   


On Tuesday 13th March, 2018?  The Council updated the list based on the information provided by the BVI and other jurisdictions, including Anguilla, Antigua and Barbuda and Dominica. The BVI was moved onto what is being referred to as the grey list. The Council decided that it has concerns about economic substance on the BVI, but since the jurisdiction has proactively engaged with the EU and committed to address these concerns it will not be blacklisted.
The BVI has until the end of 2018 to resolve any concerns the Council has about its tax arrangements based on the criteria. To this end, BVI Government intends to continue constructive engagement with the European Union on these and other matters in the coming year. The BVI and Tax The BVI is a full and participating member of the OECDs Global Forum on Tax and Exchange of Information and the Financial Action Task Force and its regional bodies, the global regulators in this area. It meets all standards that these global standard setters require. The BVI was an early adopter of the OECDs Common Reporting Standard (CRS) for the automatic exchange of tax information, and also exchanges information under the US Foreign Accounts Tax Compliance Act (FATCA). It has adopted and implemented the EU Directive on the Taxation of Savings Income and currently has 28 Tax Information Exchange Agreements. It is also part of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which provides a platform for the exchange of information with over 90 countries worldwide.


The BVI is listed as ‘largely compliant along with the UK and the US by the OECD Global Forum on Tax Transparency and Exchange of Information.


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