Report: Seychelles and Anguilla Next to Come Off Tax Haven Blacklist, not Panama

In early October, European Union finance ministers in Brussels removed the Seychelles from the EU’s tax haven blacklist along with two other states: Dominica and Anguilla. They denied the request from a fourth jurisdiction – Panama.

About the Blacklist

The European Union set up the blacklist in 2017 to combat both tax avoidance and tax evasion. They highlighted a number of jurisdictions for poor transparency. Several states cleaned up their act and subsequently removed while others have been added.

Analysts within the EU recommended the most recent removals as those jurisdictions all agreed to undergo reviews of their respective tax systems.

The organisation responsible for reviews and ongoing monitoring is Global Forum on Transparency and Exchange of Information for Tax Purposes.

Moving to the Grey List

Seychelles, Dominica, and Anguilla are now on the EU’s grey list. This is a list of countries showing genuine commitment to tax transparency reforms. What happens next will depend on the results of each’s country’s respective review.

The European Union announced the changes in late September and met a week later for formal approval. One member state raised concerns about these changes. However, it is not clear which member raised the issue, which of the jurisdictions it concerned, nor the nature of the complaint.

The Seychelles has earnt the status of “tax haven.” But the delisting came after resolution of the major point of concern.

The Situation with Panama

Panama asked for consideration among the latest batch of status changes. But the EU refused, stating that Panama lacked the commitment to abolishing FSIE (Foreign Source Income Exemption). At the time of removal of the three other jurisdictions, Panama had yet to resolve their FSIE issues.

Panama remains on the blacklist and therefore subject to stricter European Union transaction controls.

No New Blacklist Additions

The good news is that no countries currently on the grey list were moved to the blacklist. There were concerns that Turkey would move from the grey list, but this did not happen. The European Union is frustrated with Turkey over its continued refusal to exchange tax information with Cyprus.

Countries that remain on the blacklist are Vanuatu, the U.S. Virgin Islands, Trinidad and Tobago, Samoa, Panama, Palau, Guam, Fiji, and American Samoa.