First step towards a new EU list of third country jurisdictions
On 12 September, the European Commission presented a scoreboard of third country jurisdictions containing indicators monitoring their tax administrations’ best practices. It is the first step towards a common EU list of uncooperating jurisdictions. The European Commission hopes it will unify the rules of approach in the area, and help tackle aggressive tax planning taking advantage of the differences between taxation systems of individual member states.
The risk indicators concern, for instance: tax system transparency and exchange of information; the existence of preferential tax regimes; no corporate income tax or a zero corporate tax rate. They should help the EU assess the potential risk level of jurisdictions facilitating tax avoidance.
Based on the scoreboard, EU member states will be able to decide which third countries to formally screen for their good tax governance. This second stage should start early 2017. The screening will be carried out by the European Commission together with the Code of Conduct Group. Within this stage, the EC will communicate with the third country jurisdictions in question to allow them to react to any concerns raised by EU member states regarding lack of cooperation in the tax area.
Once the screening process is complete, the last stage will follow – listing. Countries that refuse to cooperate with the EU regarding good tax governance will be put on an EU list. The EC intends to publish this list at the end of 2017.