Russia on the blacklist of tax havens, the EU decision: what it means – Corriere.it

The European Union has added Russia to its blacklist of tax havens, a largely symbolic measure, given that Moscow is already subject to economic sanctions linked to the invasion of Ukraine. The list updated on February 14 now includes 16 countries. In addition to Russia, Costa Rica, the British Virgin Islands and the Marshall Islands were also added. The new list therefore includes: American Samoa, Anguilla, the Bahamas, the British Virgin Islands, Costa Rica, Fiji, Guam, the Marshall Islands, Palau, Panama, Russia, Samoa, Trinidad and Tobago, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu.

How the EU blacklist works

The list of non-cooperative jurisdictions for tax purposes was established in December 2017, to promote good governance in tax matters globally. Jurisdictions are assessed against a set of criteria established by the Council in 2016. These criteria cover tax transparency, fair taxation and the implementation of international standards intended to prevent base erosion and profit shifting. Since 2020, the Council updates the list twice a year.

Countries that have made commitments to the EU

In addition to the list of non-cooperative jurisdictions for tax purposes, Ecofin approved the usual progress report (Annex II), which reflects the EU’s ongoing cooperation with its international partners and these countries’ commitments to reform their legislation to comply with agreed standards of tax good governance. Its objective is to recognize the constructive work underway in the tax area and to encourage the positive approach taken by cooperative jurisdictions towards the application of tax good governance principles. 18 countries belong to this annex. The EU will closely monitor these commitments to ensure they are met, Ecofin said in a statement. At present, Barbados, Jamaica, North Macedonia and Uruguay have fulfilled their commitments and could therefore be removed from the document. Hong Kong and Malaysia were granted a deadline extension to complete the reform of their foreign source income exemption schemes with regards to capital gains. Qatar, on the other hand, has a month and a half to comply with the EU parameters of cooperation in tax matters. The emirate should have already modified or abolished the exemption regime for foreign source income considered harmful by the EU, but as stated in the Ecofin note, it had to face constitutional reform constraints, which is why the EU ministers decided to give the country some more time to adapt its legislation.