National defensive tax measures towards non-cooperative jurisdiction
In December 2017 the EU introduced a list of non-cooperative tax jurisdictions (the EU-list). The purpose of this list is to serve as a resource to combat tax avoidance, harmful tax practices, unfair tax competition and money laundering. At EU-level several tax and non-tax measures are imposed on countries that are included on the list. Furthermore, the EU encourages all EU member states to introduce national legislative defensive tax measures towards the listed non-cooperative jurisdictions. These national sanctions may include, but are not limited to, withholding taxes, controlled foreign company rules, limitation of the participation exemption and non-deductibility of costs related to entities in a listed jurisdiction.
In addition to the EU-list, many EU member states have their own national list. The interaction between the national lists and the EU-list strongly varies: some national lists include all the jurisdictions on the EU-list (either by individual inclusion or by direct reference), others are completely independent of the EU-list. Furthermore, not every EU member state has national legislation linked to a non-cooperative jurisdictions list and if a EU member state has such legislation, it differs what type of legislation it is and to which exact list it is linked.
The next revision is due in October 2022 and as of February 2022, the EU-list includes the following nine jurisdictions:
|American Samoa||Palau||Trinidad and Tobago
|Guam||Samoa||The US Virgin Islands
Depending on the impact of the EU-list in a particular EU member state, a change of the EU-list can potentially activate measures at national level, and as a result has an impact on companies in the EU. It is therefore critical for multinationals to analyse and understand both if and how each EU member state refers to the EU-list and if and what kind of national legislation is linked to the EU-list and/or a national list.