Changes to the EU list of non-cooperative jurisdictions

On 14th February 2023, the EU Council announced changes to the EU list of non-cooperative jurisdictions for tax purposes, adding to the blacklist the British Virgin Islands, Costa Rica and the Russian Federation. The blacklist now contains sixteen jurisdictions, with eighteen on the grey list.

The blacklist, which is updated at least twice a year, contains those jurisdictions which are deemed non-cooperative based on the EU Criteria which are set out in the Council's Conclusions and covering compliance with international standards of tax transparency, fair taxation and implementation of anti-BEPS measures.

The grey list contains jurisdictions in relation to which the EU Code of Conduct Group identified concerns during its screening process. The jurisdictions identified on the grey list have all committed to address these concerns by introducing relevant changes in their tax legislation in order to comply with the EU criteria. These jurisdictions are all, for the time being, regarded as cooperative, subject to the successful delivery of their commitments, which will be monitored by the Code of Conduct Group.

The only direct EU impact of being on the blacklist is denial of EU financing from the European Fund for Sustainable Development, though further measures may be added in the future. However, the list has also become relevant to the disclosure of cross-border tax planning arrangements under DAC 6. In particular, inclusion of a jurisdiction on the EU list of non-cooperative jurisdictions will be relevant the question whether the category C hallmark arrangements apply (cross-border transactions).