By: Dave Olenzak. President and Founder of TWC.
The EU Black List is based on three criteria: Transparency, Fair Tax Competition, and BEPS Implementation.
BEPS (Base Erosion and Profit Shifting) comprises 15 Action Items, each which require jurisdictions to undertake several actions ranging from passing local law to an exchange of information. There are three major penalties:
- Entities in jurisdiction on the EU Black List are not eligible for funding by any of the following: the European Fund for Sustainable Development (EFSD), the European Fund for Strategic Investment (EFSI), and the External Lending Mandate (ELM).
- Specific EU regulations exclude or require additional action on behalf of countries on the EU Black List.
- Member States agreed on sanctions to apply at national level against the listed jurisdictions.
Currently, the EU Black List includes (Oct, 2020):
- American Samoa,
- Trinidad and Tobago,
- US Virgin Islands,
- Vanuatu, and
Bahamas and Blacklisting (Trans World Compliance)
Questions and answers on the EU list of non-cooperative tax jurisdictions (europa.eu)