The European Code of Conduct Group (CCG) has sent out letters to six jurisdictions asking them to update their preferential tax measures or risk being blacklisted.
Barbados, Belize, Curaçao, Mauritius, Saint Lucia and the Seychelles have been asked to commit to replacing their respective ‘harmful’ tax practices and seek alternative measures, if they don’t want to find themselves in the revised ‘tax havens’ blacklist, set to appear later this year.
The first version of the blacklist was published in 2017; and several jurisdictions, including Jersey and the Isle of Man, were included on a so-called grey list and rushed to amend their tax measures by the end of 2018.
All six finance centres listed above were included on the grey list.
The EU has come under fire for not including any member states on either the black or grey lists.
While the original 2017 blacklist focused on concerns about tax transparency, fair taxation and Beps erosion, the 2019 one will include preferential tax measures.
After deeming these measures “harmful”, the CCG asked the six jurisdictions to pledge a high-level commitment to amend them before the end of 2019. The EU also asked them to avoid the introduction of grandfathering mechanisms that could reduce the impact on non-resident businesses.
Some jurisdictions have already started an intensive review of their tax measures, but had included grandfathering provisions, forcing the CCG to rule them out.
If the jurisdictions fail to comply, they will be included in the EU’s list of non-cooperative jurisdictions for tax purposes.