European Union finance ministers removed two countries from the “tax haven” blacklist. The lucky states are the United Arab Emirates and Marshall Islands. The two countries have implemented reforms required to comply with the EU requirements concerning tax residency information exchange. While the UAE have overhauled their system, the Republic of the Marshall Islands has been temporarily moved to the so-called grey list. They are still working on “bleaching” their economic reputation in the eyes of the EU. The UAE were famous for their economic zones and lack of corporate taxes, this being extremely appealing for companies looking to avoid the taxes. As of now the UAE have reviewed the operating principles of their banks in what concerns information exchange and customer identification.
One may remember that in 2017 the European Union stepped forward to create grey and black lists of countries failing to cooperate with the EU on the prevention of tax avoidance. Companies from those countries are banned from setting up accounts with European banks, and all banking transactions with EU states are subject to enhanced monitoring. These measures make doing business more complicated and cause damage to the listed countries’ reputation. The above lists are reviewed continuously, with the listed countries’ status changed depending on their actual cooperation with the European Union and implementation of specific instructions. The EU blacklist currently covers nine jurisdictions: Belize, Guam, Fiji, Samoa, American Samoa, Oman, U.S. Virgin Islands, Trinidad and Tobago, and Vanuatu. The grey list includes Anguilla, Turkey, Jordan, Palau, Curaçao, Vietnam and the above-mentioned Marshall Islands. They still have work to do to enhance their tax transparency.
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