American Samoa

Territory added to EU ‘grey list’

admin — Mon, 20 Jun 2022 17:50:01 +0000

Territory added to EU ‘grey list’

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admin Mon, 06/20/2022 - 17:50

Thursday, March 17, 2022

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Business - The BVI Beacon

Original Article

Territory added to EU ‘grey list’

The Virgin Islands has been added to the European Union’s “grey list” along with nine other jurisdictions in the Caribbean and elsewhere, the EU Council announced after its meeting on Feb. 24.

Besides the VI, the EU added the Bahamas, Belize, Bermuda, Israel, Montserrat, Russia, Tunisia, the Turks and Caicos Islands, and Vietnam, bringing the total list up to 25 jurisdictions.

Although the inclusion does not mean that any penalties or sanctions will be levied against the territory, according to the EU, the move represents a significant setback after the territory rushed through economic substance legislation at the end of 2019 in order to meet EU requirements on tax reform.

In a Feb. 24 press release, the EU Council said that the list reflects “ongoing EU cooperation with its international partners and the commitments of these countries to reform their legislation to adhere to agreed tax good governance standards.”

The countries on the grey list are working toward meeting the EU’s tax standards, the release stated.

According to the EU, criteria for the list cover tax transparency, fair taxation and preventing tax base erosion and profit shifting. The organisation called implementation of the list a “dynamic process,” and noted that the next revision is scheduled for October of this year.

Anguilla, Botswana, Costa Rica, Dominica, Hong Kong, Jamaica, Jordan, Malaysia, North Macedonia, Qatar, the Seychelles, Thailand, Turkey and Uruguay were previously added and remain on the grey list.

The blacklist, which remained unchanged after last month’s announcement, currently includes American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the United States Virgin Islands, and Vanuatu.

VI response

At a press conference late last month, Premier Andrew Fahie urged onlookers not to view the move as a censure of the territory.

He said the grey-listing meant the VI has “substantially met all international tax standards set out by the EU, but that ongoing improvements are being made to implementing tax good governance.”

As a result, he said, it has been grey-listed while it implements policies and procedures in the territory’s Country-by-Country Reporting framework.

“No defensive measures flow from being on such list and the BVI is still a cooperative jurisdiction,” he said. “Once the BVI meets these commitments, it will be removed from the annex.”

He added that the territory “takes its international obligations seriously” and had already been finalising the necessary steps to ensure successful implementation of the recommendations.

This week, BVI Finance CEO Elise Donovan directed queries to the Premier’s Office. Director of Communications Dr. Arliene Penn said, “BVI’s addition to EU’s Annex II is a positive rating for us because it acknowledges that BVI is a cooperative jurisdiction that has implemented measures (in the case of the Country-by-Country Reporting) in accordance with the high international standards prescribed. The BVI remains highly committed to the transparency and international cooperation agenda.”

The EU has hinted for some time that it would seek to modify its requirements for the list, the latest iteration of which was announced last October.

In February 2021, the European parliament passed a resolution calling for a measure that would automatically blacklist British territories like the VI, the Cayman Islands and the Channel Islands that have a zero percent corporate tax rate — and that now have a weakened voice in the EU in the wake of the United Kingdom’s split from the organisation.

The resolution did not mention the VI at the time, but it came before the revelation that nearly two-thirds of companies named in the far-reaching Pandora Papers investigation last year were based in the VI.

Panama, which is already on the EU blacklist, was host to the second highest number.

World response

Meanwhile, the EU Observer reported late last month that tax-reform campaigners are already applauding the news.

Chiara Putaturo, a campaigner with the non-profit Oxfam, praised the move, but complained that the Cayman Islands was not included.

“If the [new] grey-listing … is confirmed, we will see some real tax havens finally at risk to be blacklisted [in the future],” she said. “However, there are still other tax havens that are left off the hook, … such as the Cayman Islands, because the criteria remain weak.”

History

As in other OTs, leaders in the VI have long criticised the EU’s blacklists as arbitrary and misleading, maintaining that the territory’s financial services industry is tightly regulated in keeping with international standards.

Nevertheless, the VI was grey-listed along with other jurisdictions in 2017. In March 2018, the EU concluded that the VI, the Bahamas and Cayman needed further technical guidance from the EU and had until the end of 2019 to adapt local legislation, which resulted in the Economic Substance Act being rushed through the House of Assembly in late 2018.

Thanks to this move, the VI was white-listed, alongside 16 other jurisdictions, in February 2020.

The post Territory added to EU ‘grey list’ first appeared on The BVI Beacon.

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Sue over blacklist, says economist

admin — Mon, 20 Jun 2022 17:40:01 +0000

Sue over blacklist, says economist

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admin Mon, 06/20/2022 - 17:40

Thursday, April 28, 2022

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Business - The BVI Beacon

Original Article

Sue over blacklist, says economist

Caribbean countries that live in fear of being blacklisted by the European Union should band together and take legal action, according to Barbados-based economist and Caribbean policy expert Marla Dukharan.

“I felt like there should be some legal recourse that should be pursued collectively,” Ms. Dukharan said on Feb. 23 on the regional livestreamed show “Territories Talk,” hosted by Shaina Smith-Archer, chairwoman of the BVI Chamber of Commerce and Hotel Association.

The EU blacklist often comes under fire in the VI for being a moving target.

Ms. Dukharan said it is also unfair. EU member states such as the Netherlands and Ireland are “well known for their extensive money laundering and tax evading activities,” but have never been included on any EU blacklist, she said.

To her, this suggests Eurocentrism or even racism, and perhaps an effort to undermine countries that are “eating part of their pie,” she said of the EU.

Grey-listed

In February, the territory was added to the EU’s “grey list,” along with nine other jurisdictions in the Caribbean and elsewhere.

Besides the VI, the EU added the Bahamas, Belize, Bermuda, Israel, Montserrat, Russia, Tunisia, the Turks and Caicos Islands, and Vietnam, bringing the total on the list up to 25 jurisdictions.

Although the February inclusion does not mean that any penalties or sanctions will be levied against the territory, the move represents a significant setback after the VI rushed through economic substance legislation at the end of 2019 in order to meet EU requirements on tax reform.

The standards for inclusion on the EU lists have frequently changed, and Ms. Dukharan pointed out that the European Parliament itself has noted problems with the selection process.

In 2021, the legislative body proposed that the tax regimes of EU member states be scrutinised along with the rest of the world and subject to blacklisting if they don’t measure up.

“That tells you that you have a legal leg to stand on, because they, the policymakers, have acknowledged that we are not applying our own standards to our own member states, and that’s not fair,” she said. “Why is it that our countries have not come together, found a law firm that will represent us collectively, and taken them to court over this action?”

Fighting back

She added that even a statement from the Caribbean Community condemning the actions of the EU is simply “not strong enough.”

“I think if all of the countries came together from the Pacific and the Caribbean and agitated and protested, I think that there is a chance,” she said. “For example, if you appeal to the United Nations, you appeal to the World Trade Organisation, somebody is going to hear you. But when each individual little tiny micro state appeals individually, it is just white noise.”

She also recommended that countries that object to the blacklist expel EU ambassadors.

“The second thing I think we need to do is take diplomatic action,” she said.

With changing criteria, she noted, even countries that have satisfied the Financial Action Task Force and Organisation for Economic Cooperation and Development standards still run the risk of being blacklisted.

“But we don’t have the courage to do these things because we are small and we are insecure maybe,” she said.

Current list

In a Feb. 24 press release, the EU Council said that the grey list reflects “ongoing EU cooperation with its international partners and the commitments of these countries to reform their legislation to adhere to agreed tax good governance standards.”

The countries on the grey list are working toward meeting the EU’s tax standards, the release stated.

According to the EU, criteriafor the list cover tax transparency, fair taxation and preventing tax base erosion and profit shifting. The next revision is scheduled for October.

Anguilla, Botswana, Costa Rica, Dominica, Hong Kong, Jamaica, Jordan, Malaysia, North Macedonia, Qatar, the Seychelles, Thailand, Turkey and Uruguay were previously added and remain on the grey list.

The blacklist for “non-cooperative” tax jurisdictions, which remained unchanged after the February announcement, currently includes American Samoa, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, the United States VI, and Vanuatu.

The post Sue over blacklist, says economist first appeared on The BVI Beacon.

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Barbados off EU blacklist

admin — Mon, 22 Feb 2021 16:50:01 +0000

Barbados off EU blacklist

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admin Mon, 02/22/2021 - 16:50

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NationNews Barbados — nationnews.com

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Barbados off EU blacklist

Barbados has been officially removed from the European Union’s (EU) controversial tax blacklist.

This morning, the EU Council adopted its latest list of non-cooperative jurisdictions for tax purposes and Barbados was not on it.

Minister of International Business Ronald Toppin confirmed the news and said Government was “very pleased about this”.

There are, however, other Caribbean countries included, with Anguilla and Trinidad and Tobago still the on list, and Dominica a new addition.

The other blacklisted countries are American Samoa, Fiji, Guam, Palau, Panama, Samoa, Seychelles, United States Virgin Islands and Vanuatu.

Barbados was among countries singled out by the EU last October because it did not “have a rating of at least ‘Largely Compliant’ by the Global Forum on Transparency and Exchange of Information for Tax Purposes for Exchange of Information on Request and has not resolved this issue yet”.

In December, Government application for a Supplementary Review from the Organisation for Economic Cooperation and Development (OECD) was approved, paving the way for this country to be taken off the blacklist.

EU officials said the list, which is updated twice a year, will next be issued in October. (SC)

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VI threatened with EU blacklist again

admin — Wed, 03 Feb 2021 17:30:01 +0000

VI threatened with EU blacklist again admin Wed, 02/03/2021 - 17:30

Wednesday, February 3, 2021

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Business – The BVI Beacon

Original Article

VI threatened with EU blacklist again

The dawn of Brexit could find the Virgin Islands on the European Union blacklist of non-cooperative tax jurisdictions even though the territory passed economic substance legislation in 2018 specifically to avoid that censure.

Last week, the European parliament passed a resolution calling for a measure that would automatically blacklist British territories like the VI, the Cayman Islands and the Channel Islands that have a zero percent corporate tax rate — and that now have a weakened voice in the EU in the wake of the United Kingdom’s split from the organisation.

The VI is not specifically mentioned in the resolution, which singled out the Cayman Islands — a UK territory that was removed from the blacklist late last year — for still having a zero percent corporate tax rate and for its inclusion in the top 10 destinations for “phantom investments” in a ranking by the International Monetary Fund.

This situation “raises questions about transparency and about a possible preferential approach to some countries,” the resolution states. “The State of Tax Justice 2020 report found that a mere two percent of global tax losses were caused by jurisdictions on the EU list;whereas the Cayman Islands were found to be the jurisdiction responsible for the most global tax losses, costing others over $70 billion a year, or 16.5 percent of the total tax losses.”

The resolution, which passed last week by a vote of 587 to 50, includes provisions calling for the automatic inclusion of countries that use a zero percent tax regime.

The inclusion of such jurisdictions on the blacklist, which was last revised in October and now includes 12 jurisdictions, would rest on a decision by the 27 member states on the EU’s Economic and Financial Affairs Council, which was set to meet this week.

History

Nevertheless, the VI was grey-listed along with other jurisdictions in 2017. At the last review of the list in March 2018, the EU concluded that the VI, the Bahamas and Cayman needed further technical guidance from the EU and had until the end of 2019 to adapt local legislation, which resulted in the Economic Substance Act being rushed through the House of Assembly in late 2018.

Thanks to this move, the VI was whitelisted, alongside 16 other jurisdictions, in February 2020. Although Cayman did pass new legislation at the end of January 2020, it appears the move came too late, with the EU stating that the territory “does not have appropriate measures in place relating to economic substance in the area of collective investment vehicles.” Thus, Cayman remained on the blacklist before being removed in October along with Oman.

The list currently includes American Samoa, Anguilla, Barbados, Fiji, Guam, Palau, Panama, Samoa, the Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu. However, in its resolution last week, EU noted that some of the most “harmful third jurisdictions,” including the Cayman Islands and Bermuda, had been removed from the list after “very minimal substance criteria and weak enforcement measures.”

The EU’s resolution calls on the EU Council to “include the automatic listing of third jurisdictions with a zero percent corporate tax rate or with no taxes on companies’ profits as a standalone criterion.”

Besides Brexit, the Covid-19 pandemic has put pressure on nations to tackle budget shortfalls, causing them to look to low-tax jurisdictions to recover the perceived lost revenue. The Brexit deal was based on “mutual values and geared towards common prosperity, which automatically excludes aggressive tax competition,” the resolution noted.

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