8 November 2019 the Council of the European Union has informed of its decision to exclude Belize from the “blacklist” of non-cooperative jurisdictions for tax purposes.

It is stated that this decision was based on expected adoption of several measures to abolish the regime that provides for full exemption of taxation for International Business Companies, some features of which are “harmful” for tax administration in the opinion of the Council. 

Despite the fact that such measures were to be adopted by the end of 2018, public authorities of this jurisdiction have made a commitment to undertake all necessary reforms by the end of 2019. Thus, Belize have been removed from the “blacklist” (that is excluded from Annex I of Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes) and added to so called “grey list” (Annex II of the document mentioned above).

After Belize has been de-listed, 8 jurisdictions remained in the “blacklist”:

American Samoa Samoa
Fiji Trinidad and Tobago
Guam US Virgin Islands
Oman Vanuatu

Simultaneously, the council removed North Macedonia from the “grey list”of non-cooperative jurisdictions. In this case the ratification of the OECD multilateral convention on mutual administrative assistance by this jurisdiction has played the most important role.

The following jurisdictions still remain in the “grey list”: Australia, Anguilla, Antigua and Barbuda, Armenia, Bahamas, Barbados, Belize, Bermuda, Bosnia and Herzegovina, Botswana, British Virgin Islands, Jordan, Cape Verde, Cayman Islands, Curacao, Maldives, Morocco, Marshall Islands, Mongolia Nauru, Namibia, Cook Islands, Palau, Saint Kitts and Nevis, Saint Lucia, Seychelles, Thailand, Turkey, Montenegro, Esvatini, Vietnam.

The “blacklist” has been published by the Council for the first time in December 2017 and included the jurisdictions with preferential tax regimes (zero or low taxation), as well as those jurisdictions that did not meet common standards of tax transparency in the opinion of the Council. It was also mentioned that the “blacklist” may be revised and amended if necessary.

The “grey list” is composed of jurisdictions that have made commitments to eliminate the non-compliance with common standards of tax administration and exchange of information which are in the course of making necessary steps. Based on the results of monitoring of such steps the Council may decide to include particular jurisdiction to “blacklist”, or to de-list it from the “grey list” at all. The Council does not specify any measures to be taken to jurisdictions from the “grey list”.

On the contrary, several measures can be applicable (which is recommended) to blacklisted jurisdictions, such as:

  1. Non-deductibility of costs;
  2. Controlled Foreign Company rules;
  3. Withholding tax measures;
  4. Limitation of participation exemption;
  5. Switch-over rule;
  6. Reversal of the burden of proof;
  7. Special documentation requirements;
  8. Mandatory disclosure by tax intermediaries of specific tax schemes with respect to cross-border arrangements.

It has also been informed that starting from 2020 the “blacklist” will be revised and updated twice a year. 

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