On 05 Dec 2017, the EU Council has issued a ‘black-list’ of non-cooperative jurisdictions for tax purposes. In particular, the list highlights jurisdictions that have not yet shown an initiative to implement the Base Erosion and Profit Shifting (BEPS) Action Plan, the Multilateral Convention on Mutual Administrative Assistance and automatic exchange of information issued by the OECD.
The Council recommends that EU member states apply defensive
measures against the black-listed jurisdictions to persuade the jurisdiction to
implement the standards for greater tax transparency. Such defensive measures could
be the reinforcement of monitoring of certain transactions and increased audit
risk for national taxpayers using or benefiting from structures or arrangements
in the black-listed jurisdictions. The Council further lists out measures that
member states may consider to apply in line with their national tax laws: a) Non-deductibility
of costs; b) Controlled Foreign Company (CFC) Rules; c) Withholding tax
measures; d) Limitation of participation exemption; e)Switch-over rule; f)
Reversal of burden of proof; g) Special documentation requirements; h)
Mandatory disclosure by tax intermediaries of specific tax schemes with respect
to cross-border arrangements.
The EU list of non-cooperative jurisdictions for tax
purposes include:
1.
American Samoa
2.
Bahrain
3.
Barbados
4.
Grenada
5.
Guam
6.
South Korea
7.
Macao
8.
Marshall Islands
9.
Mongolia
10.
Namibia
11.
Palau
12.
Panama
13.
Saint Lucia
14.
Samoa
15.
Trinidad and Tobago
16.
Tunisia
17.
United Arab Emirates