Early this month, on December 5, on behalf of the Finance Ministers of the member countries of the European Union, the list of tax non-cooperative countries and territories was approved for the first time.

The main objective of this new measure is to improve the level of correct fiscal governance and prevent large-scale fiscal abuses.

Current list is composed of 17 countries and territories, but it is not the final one. There are another 47 territories under observation that must comply with the regulations proposed by the EU to avoid their inclusion in the list.

✔ Creation and maintenance of the list is a dynamic process that will continue in the coming years, and includes proposals for the listed countries with the measures that can be carried out to be excluded from it. Review and updates will be done annually.

✔ The criteria defined for updating the list would be:

  • Fiscal transparency that includes the commitment to carry out the legislative procedure on the automatic exchange of information of the OECD or to apply the Multilateral Agreement of Mutual Administrative Assistance in Fiscal Matters of the OECD;
  • Fiscal equity: commitment not to apply harmful fiscal measures or not to facilitate extraterritorial mechanisms designed to attract benefits lacking real economic activity in the territory in question;
  • Application of measures considered as minimum criteria of the OECD, against erosion of the tax base and shifting of profits.

✔ The member countries in the list published this December 5 are American Samoa, Bahrain, Barbados, Grenada, Guam, Republic of Korea, Macao SAR, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Trinidad and Tobago, Tunisia and United Arab Emirates.

✔ The greatest achievement of the EU list process are the concrete commitments made by many, a high level to improve the particular standards, presenting a real mechanism of pressure towards the included territories to improve their fiscal behaviour. By not receiving the response to the regulations issued, restrictions will be applied in the channelling of aid funds by the EU, more stringent information requirements will be requested from multinationals with activities in countries included in the list and various sanctions will be adopted at the state level against these jurisdictions.