EU takes out Bahamas, Seychelles, Belize; and Turks and Caicos from its list of tax havens

The European Union He took out this Tuesday to Bahamas, Seychelles, Belize; and Turks and Caicos from their blacklist of tax havens after these jurisdictions have approved measures to improve their tax cooperation with the Twenty-seven.

Following the decision taken by the Member States, twelve territories appear in the directory: Panama, Russia, American Samoa, Anguilla, Antigua and Barbuda, Fiji, Guam, Palau, Samoa, Trinidad and Tobago, the US Virgin Islands and Vanuatu.

The list, which has been in operation since 2017 and is updated every six months, includes those jurisdictions that fail to comply with EU standards on tax transparency, tax fairness or implementation of international standards to avoid erosion of the tax base or shifting of benefits, and that also do not take steps to address these problems.

Being included in it does not entail economic sanctions, beyond the prohibition of European funds transiting through entities located in these jurisdictions and administrative measures, such as more frequent audits, although States may decide at the national level to impose other types of penalties.

The EU decided to remove the Bahamas and Turks and Caicos from its list because the OECD has softened its recommendations to both countries due to their deficiencies in applying the rules on economic substance requirements – which prove that companies have real activity -, which has led the Twenty-seven to consider that they meet the standards set for jurisdictions without tax societies or with a nominal tax only.

For their part, Belize and Seychelles had been included on the list after a negative evaluation by the OECD on their standards for the exchange of tax information. Given that both have applied changes that have led the OECD to grant them a new review “in the near future”, the EU has decided to remove them from the list until the results are available, as explained by the Council in a statement.

On the other hand, the Twenty-seven have also updated the so-called “gray list”, which includes those jurisdictions that do not fully comply with the standards of the EU to be considered cooperative, but that they have committed to making changes to comply.

Israel and Aruba emerge from it after having undertaken the promised changes regarding the automatic exchange of financial information, as well as Albania and Hong Kong after having amended tax regimes considered harmful by the EU.

Botswana and Dominica also no longer appear after the OECD gave them a positive evaluation on the exchange of information on demand.

Of the four jurisdictions that have left the blacklist, Belize and Seychelles continue to appear in the gray list pending the review of their information exchanges, along with eight other jurisdictions: Costa Rica, Turkey, Curaçao, the British Virgin Islands, Malaysia, Armenia, Eswatini; and Vietnam.

Bahamas and Turks and Caicos; However, they no longer appear in this repertoire.

The EU will update its list again next December.