The EU "Blacklist"
What is the significance of the EU ‘blacklist’ for companies based in the affected jurisdictions?
The direct effects of the so-called blacklist are currently (as of 18.02.2020) rather negligible for individual companies. The ‘blacklist’ officially bears the name ‘EU list of non-cooperative tax jurisdictions’ and contains territories, which, according to EU member states, have shortfalls in their efforts to achieve fair tax competition. The aim is to protect domestic tax revenues and curtail opportunities for ‘tax evasion’. The list is intended to ensure that the classification of a ‘tax haven’ is consistent throughout the EU.
At present, the only real legal impact this list has is that companies based in these territories/countries may not be awarded contracts financed by or with EU state resources, which includes subsidies from the EU or its member states.
Additionally, European tax authorities are expected to initiate tighter controls whenever business relations are established within the EU.
It is therefore to be expected that both Panama and the Seychelles will introduce new regulations in response to the points criticised by the EU, however it is not yet known what specific legal changes are associated with this. Nevertheless, we assume that both jurisdictions will be removed from this ‘blacklist’ in the short to medium term.
You can find further information and references regarding the blacklist on the official EU website via the following link https://ec.europa.eu/taxation_customs/tax-common-eu-list_en.