What Got into 'Black List' of Offshore Jurisdictions Made by European Union?

2015-07-15 09:30
Tax news

European Commission announced Action Plan on A Fair and Efficient Corporate Tax System in the European Union on 17th of June[1]. The purpose of Action Plan is to reform corporate taxation system in EU, solve problems of tax abuse, ensure support of the long-term income and improve the business environment in the Single market. The list of 30 non-cooperative jurisdictions ('black list') was also published.

Adoption of Action plan and publication of 'black list'

According to Action Plan, five main areas in taxation area in which will be take action are mentioned below:
1. Re-launching the Common Consolidated Corporate Tax Base (CCCTB);
2. Ensuring fair taxation where profits are generated;
3. Creating a better business environment;
4. Increasing transparency;
5. Improving EU coordination.
Please look timeline table here.[2]

Commission agree to re-launch Platform on Tax Good Governance[3] and implement its working scope and methods. Commission also published a map of non-cooperative jurisdictions. This map is one of measures to improve the EU response to external treats to member states‘ taxation systems. In the top 10 of common non-cooperative offshore jurisdictions list (‘black list’) are mentioned these: Andorra, Liechtenstein, Guernsey, Monaco, Mauritius, Liberia, Seychelles, Brunei, Hong Kong, Maldives.[4]

Law Firm JURIDICON recently published article [5] about automatic exchange of information about foreign bank accounts between jurisdictions in taxation matters. It should be noted that in the ‘black list’ of EU mentioned offshore jurisdictions, such as, Liechtenstein, Guernsey, Mauritius and Seychelles in 2017 and in Andorra and Hong Kong in 2018 will start performance of Standards on Automatic Exchange of Information.[6]

Commission published the table with EU member states and list of criteria that they are using when constructing national ‘black list’ of offshore jurisdictions. Criteria mentioned in this table: 1) compliance with transparency and exchange of information standards; 2) absence of harmful tax measures; 3) other criteria. Most of member states use first and second criteria and also other self-set criteria (Lithuania too). On the other hand,  Germany is the only one which uses just first criteria – compliance with transparency and exchange of information standards, while Slovenia does not use first and second mentioned criteria but only its own national criteria. [7]

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs, said that corporate taxation in the EU needs radical reform. In the interests of growth, competitiveness and fairness, Member States need to pull together and everyone must pay their fair share. According to Moscovici, the Commission has laid the foundation for a new approach to corporate taxation in the EU and Member States must now build on it.[8]

Reaction to the ‘black list’

As might have been expected, offshore jurisdictions are not pleased about this EU decision on publishing ‘black list’. For example, Guernsey in the June 2015 announced deprecation on decision to include Guernsey into EU list. Guernsey Finance said that the EU list consolidates national tax ‘black lists’ as they stood six months ago, and includes any jurisdiction on 10 or more member states' lists. According to Guernsey Finance agency, Guernsey is included in 9 national ‘black lists’.

Guernsey's Chief Minister, Jonathan Le Tocq, said that Commission appears to have hurriedly put together a list of so-called 'non-cooperative' non-EU jurisdictions using some self-willed criteria. In accordance to this type of criteria and inconsistent use of 'black lists' that international standards are supposed to be replacing, so this seems to me to run counter to what the Commission itself is trying to do on tax transparency.

Chief Minister submitted the written note to Commission to express Guernsey's disappointment and surprise that it is on the list, and to ask them to have Guernsey removed from it as quickly as possible. He also noted that Guernsey leads a number of EU member states on tax transparency and cooperation, and also will be partners of the EU in the automatic exchange of information under the Common Reporting Standard[9]. He concluded that this means they are well ahead of the full EU 28 – and yet have been erroneously placed on an arbitrarily defined ‘black list’ of offshore jurisdictions.

The government of Guernsey also noted that they are mentioned in 9 national black lists rather than 11, which was confirmed by the Latvian and Polish governments, but the Commission chose not to take that into account. Guernsey is on nine national blacklists, the same as other jurisdictions such as the Isle of Man and Gibraltar, yet Guernsey is included on the so-called non-cooperation list and they quite rightly are not. The government of Guernsey confirmed that they will be seeking to be removed from this list as soon as possible, and will work with the Commission as well as their partners in the EU member states in order to do so.[10]


[1]Communication from the Commission to the European Parliament and the Council. A Fair and Efficient Corporate Tax System in the European Union: 5 Key Areas.

[2]Timeline for Action for Fair and Efficient Corporate Taxation.

[3]Platform on Tax God Governance. 

[4]European Commision issues "black list" of 30 tax havens. 2015-06-26. My Panama Lawyer blog.

[5]Disclosure of the Secret of Foreign Bank Accounts at the International Level. 25th of June, Juridicon.

[6]Signatories of the Multiliteral  Competent Authority Agreement and Intended First Information Exchange Date.

[7]Supra note 4.

[8]Commision Presents Action Plan for Fair and Efficient Corporate Taxation. Press release, 17th of June 2015.

[9]Standard for Automatic Exchange of Financial Account information.

[10]Gorringe, J. Guernsey Decries Its Inclusion On EU Blacklist. 2015-06-18, LowTax.