EU keeps Panama and eight other countries on its list of tax havens

The countries of the European Union approved this Thursday to keep Panama, American Samoa, Fiji, Guam, Palau, Trinidad and Tobago, the American Virgin Islands and Vanuatu on their blacklist of tax havens after verifying that they continue not to cooperate or have not done the reforms to which they had committed.

The list, which is updated every six months, this time without changes, includes those jurisdictions that fail to comply with EU standards in terms of tax transparency, tax justice or implementation of international standards to prevent the erosion of the tax base or the transfer of benefits, and also do not take steps to address these problems.

In the case of Panama, it does not meet international criteria on transparency and exchange of tax information and has a system of exemption of income from abroad considered harmful by the EU.

The country has committed, however, to comply with the recommendations of the OECD’s anti-base erosion framework regarding country-by-country reporting by multinationals in time for the autumn 2023 review, as stated in the document approved today by the Council of Industry Ministers of the EU.

They have also updated what is known as “gray list”, which lists the countries that have committed to implementing reforms to improve transparency or tax cooperation with the EU.

Turkey, Uruguay, Costa Rica, Jamaica, Botswana, Barbados, Hong Kong, Malaysia, Qatar, Jordan and North Macedonia continue to appear in it.

In addition, it so happens that the Russian Federation appears for the first time on this list after committing to modify a preferential tax regime, specifically relating to companies “holding company” (which brings together companies) international.

Despite the fact that it coincides in time with the sanctions imposed by the EU on Moscow for the crisis in Ukraine, now turned into an armed conflict, the measure is unrelated to this situation and, in fact, cooperation with Russia on tax matters has always been good, according to European sources.

The purpose of this list, they recall, is also to account for the new commitments made by third countries to improve cooperation and governance in tax matters.

Hence, the Bahamas, Belize, the British Virgin Islands, Israel, Montserrat, Thailand, Tunisia and Vietnam have also been incorporated into this repertoire after committing to implement the rules on country-by-country declarations within the framework of the OECD.

Being on the blacklist of fiscal countries does not entail economic sanctions, beyond the prohibition that European funds transit through entities located in these jurisdictions and administrative measures, such as more frequent audits.

EU states can decide at national level to impose other types of sanctions.