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EU issues blacklist of non-cooperative jurisdictions

The European Commission published, on 17 June 2015, its first list of so-called “non-cooperative jurisdictions” as part of a crackdown on on tax avoidance by multinational companies. The list was announced alongside more substantive proposals for a common consolidated corporate tax base (CCCTB), which follows a series of investigations into arrangements between EU countries and firms including Amazon, Apple and Starbucks.

Pierre Moscovici, the European commissioner with responsibility for tax, said: “Our current approach to corporate taxation no longer fits today’s reality. We are using outdated tools and unilateral measures to respond to the challenges of a digitalised, globalised economy.”

The CCCTB measure will look to harmonise corporate income tax rules among member states in a further effort to combat aggressive tax avoidance. Moscovici conceded that — in the first instance at least — the controversial “consolidated” element of the tax reforms would have to be delayed.

The list of 30 non-cooperative jurisdictions includes Hong Kong and Brunei in Asia, Monaco, Liechtenstein, Andorra and Guernsey in Europe and a number of Caribbean territories including the Cayman Islands and British Virgin Islands. The list consolidates national tax “blacklists” as they stood six months ago, and includes any jurisdiction that appears on 10 or more member states lists. It does not include the Netherlands, Ireland or Luxembourg, which are all currently under investigation by the Commission, because it only assesses non-EU members.

Moscovici said publication of the blacklist was a “decisive step” that would “push non-cooperative non-EU jurisdictions to be more co-operative and adopt international standards”. However Guernsey’s Chief Minister Jonathan Le Tocq expressed his astonishment at Guernsey’s inclusion. He said Guernsey was only on nine national blacklists but was included because Sark, for which it has no legal responsibility in tax matters, appeared on another blacklist.

“The Commission appears to have hurriedly put together a list of so-called ‘non-cooperative’ non-EU jurisdictions using some very arbitrary criteria,” said Le Tocq. “It is this type of arbitrary and inconsistent use of ‘blacklists’ that international standards are supposed to be replacing, so this seems to me to run counter to what the Commission itself is trying to do on tax transparency. It also runs counter to Commissioner Moscovici’s own positive views on Guernsey, which we discussed just over a month ago.

“The fact remains that we lead a number of EU Member States on tax transparency and cooperation, and we will be partners of the EU in the automatic exchange of information under the Common Reporting Standard. This means we are well ahead of the full EU 28 – and yet we have been erroneously placed on an arbitrarily defined blacklist. Our priority is to be removed from this list,” he added.

The full EU blacklist is: Andorra, Liechtenstein, Guernsey, Monaco, Mauritius, Liberia, the Seychelles, Brunei, Hong Kong, Maldives, Cook Islands, Nauru, Niue, the Marshall Islands, Vanuatu, Anguilla, Antigua and Barbuda, the Bahamas, Barbados, Belize, Bermuda, the British Virgin Islands, the Cayman Islands, Grenada, Montserrat, Panama, St Vincent and the Grenadines, St Kitts and Nevis, the Turks and Caicos and the US Virgin Islands.


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