On February 21, 2023, the updated list of non-cooperative jurisdictions for tax purposes came into effect following its publication in the Official Journal of the European Union. This revision followed the adoption of conclusions by the Economic and Financial Affairs Council (ECOFIN) on February 14, 2023. The ECOFIN Council addressed both the EU list of non-cooperative jurisdictions (Annex I) and the progress made by cooperative jurisdictions in implementing tax good governance principles (Annex II, the so-called “grey list”).

The updated EU list of non-cooperative jurisdictions now includes the following sixteen territories, with additions in bold for ease of reference:

1. American Samoa,
2. Anguilla,
3. Bahamas,
4. British Virgin Islands,
5. Costa Rica,
6. Fiji,
7. Guam,
8. Marshall Islands,
9. Palau,
10. Panama,
11. the Russian Federation,
12. Samoa,
13. Trinidad and Tobago,
14. Turks and Caicos Islands,
15. US Virgin Islands, and
16. Vanuatu.

What’s Next?

The next update to the list is expected to take place in October 2023, continuing to assess jurisdictions’ adherence to international tax standards.

For more detailed information on the evolution of the EU list of non-cooperative jurisdictions, including the specific effective dates when jurisdictions were added or removed, please refer to our full alert [here].

Cyprus’ Defensive Measures

As of December 31, 2022, Cyprus implemented withholding tax (WHT) measures on certain outbound payments, including dividends, interest, and royalties, if the recipient is a company based in a jurisdiction listed on the EU’s non-cooperative list (Annex I).

For further details on Cyprus’ defensive measures, please refer to our full alert [here].

Impact on EU Mandatory Disclosure Rules (DAC6)

The revised EU list of non-cooperative jurisdictions also plays a key role in the EU’s mandatory disclosure rules under DAC6. If a recipient of cross-border payments is based in one of the non-cooperative jurisdictions, the transaction may trigger a reporting obligation. Under Hallmark C1b(ii) of DAC6, such payments must be reported, even if the transaction is not intended to generate a tax benefit (since the main benefit test does not apply in these cases).

How George Kaimakliotis & Co Ltd Can Help

George Kaimakliotis & Co Ltd offers expert advisory services to help businesses understand the implications of the updated EU list of non-cooperative jurisdictions. We assist with ensuring compliance with Cyprus’ withholding tax (WHT) measures and guide businesses through the complexities of mandatory reporting under DAC6. Our team is well-equipped to provide support on tax governance matters, including proper handling of cross-border payments and necessary reporting obligations to ensure that your business stays compliant with EU tax regulations. Reach out to us for professional advice tailored to your specific needs in the ever-evolving international tax landscape.