While the Dutch Minister of Finance has published an update of the list of low tax jurisdictions by the end of last year, the EU Finance Ministers have published an update of the EU list of non-cooperative tax jurisdictions as well, on 18 February 2020. Cayman Islands, Palau and Seychelles were moved from the grey list to the black list and Panama was added to the black list. Currently the EU blacklist consists of American Samoa, Fiji, Guam, Samoa, Oman, Trinidad and Tobago, Vanuatu, US Virgin Islands, Panama, Cayman Islands, Palau and Seychelles.
The Dutch State Secretary of Finance updates its Decree low tax jurisdictions and non-cooperative jurisdictions for tax purposes (´Decree´) every year. The non-cooperative jurisdictions as listed on the EU blacklist on the moment of publication of the updated Decree, are included in the Decree. This means that, if Panama, Cayman Islands, Palau and Seychelles are still listed on the EU blacklist upon publication of the Decree for 2021, the Dutch CFC-rules will become applicable to entities located in Panama, Cayman Islands, Palau and Seychelles, transactions with these jurisdictions will no longer be eligible for concluding an Advance Tax Ruling or an Advance Pricing Agreement and the conditional withholding tax on interest and royalties will become applicable on interest and royalty payments to these jurisdictions. The EU Finance Ministers regularly check whether the blacklisted jurisdictions fulfilled their obligations and update the EU blacklist on an ongoing basis and it is therefore not certain that the aforementioned rules will become applicable to Panama, Cayman Islands, Palau and Seychelles. The next update of the EU blacklist is expected in October 2020.
See our earlier post on the update of the Dutch list of low tax jurisdictions.
Please contact Jimmie van der Zwaan or Gerriët Nagelhout.