The EU Council revised its
list of non-cooperative jurisdictions for tax purposes on 17 October 2023,
adding Seychelles, Belize and Antigua and Barbuda. British Virgin Islands,
Costa Rica and Marshall Islands that were previously included in the list, were
removed.
The list includes countries which
have either not engaged in a constructive dialogue with the EU on tax
governance or have failed to deliver on their commitments to implement the
necessary reforms. Those reforms should aim to comply with a set of objective
tax good governance criteria, which include tax transparency, fair taxation and
implementation of international standards designed to prevent tax base erosion
and profit shifting.
The list now consists of 16
jurisdictions. In addition to the three jurisdictions mentioned above, it includes
American Samoa, Anguilla, Bahamas, Fiji, Guam, Palau, Panama, Russia, Samoa,
Trinidad and Tobago, Turks and Caicos Islands, US Virgin Islands and Vanuatu.
The official EU Council Press
Release, which outlines the reasoning of the decision can be found here.
Cyprus resident taxpayers having
transactions or operations with parties located in a jurisdiction included in
the EU list of non-cooperative jurisdictions for tax purposes need to consider
the following implications:
As per EU Mandatory Disclosure
Rules (DAC6) arrangements that involve deductible cross-border payments made
between associated enterprises where the recipient is resident in a
jurisdiction included in the EU list of non-cooperative jurisdictions for tax
purposes, are reportable, irrespective of whether the main benefit test is met
or not.
Dividends, interest and
royalty payments made by companies that are tax resident in Cyprus to companies
located in a jurisdiction included in the EU list of non-cooperative
jurisdictions for tax purposes, may be subject to a withholding tax in Cyprus
(subject to conditions). You can refer to our related newsfeed on this for
more details.
Furthermore, the list is
relevant for Public Country by Country Reporting purposes since, under certain
conditions, the requirement to publish disaggregated information for a
jurisdiction included in it may be triggered.
