BRUSSELS, Belgium, Monday May 20, 2019 – Barbados, Bermuda and Aruba are back in the European Union’s good books as far as being cooperative in tax matters is concerned.
The three Caribbean nations have been removed from the blacklist of tax havens which was established in December 2017 and revised in March this year, with Barbados and Bermuda being moved to a grey list of jurisdictions which will still be under scrutiny but will get time to become fully compliant, while Aruba has been cleared altogether.
The EU Council said in a statement that Barbados has made commitments at a high political level to remedy EU concerns regarding the replacement of its harmful preferential regimes by a measure of similar effect, whilst Aruba and Bermuda have now implemented their commitments.
“At the same time, Bermuda remains committed to address EU concerns in the area of collective investment funds,” it said.
As a consequence, Barbados and Bermuda have been moved from the list of non-cooperative tax jurisdictions to the list of jurisdictions that have undertaken sufficient commitments to reform their tax policies, while Aruba will be removed entirely from both.
Twelve countries remain on the list of non-cooperative jurisdictions, including Belize, Dominica, Trinidad and Tobago, and the US Virgin Islands.
Both Barbados’ Prime Minister Mia Mottley and Bermuda’s Finance Minister Curtis Dickinson said they were “pleased and thankful” their countries had been removed from the list.
Explaining the significance for Barbados, Mottley said: “It means insurance companies that could have left us will now not do so because they will not be prohibited from doing business in Europe, [as would have been the case] as a result of the blacklist.
“This has tangible meaning for us as we go forward. It does not mean that the battle is over because we live in a world where persons will want to continue to extract every competitive advantage that they can,” she added, noting that the imposition of rules and bureaucracy would act as a non-tariff barrier to keep some countries uncompetitive.
Dickinson also stressed that his country would have more work to do.
“Bermuda has done considerable work to become a well-regulated and respected jurisdiction. Our reputation and commitment in that regard kept our industry partners and other influential persons ‘in our corner’ through this challenging process….
“I recognize that the positive decision by the EU is by no means the end of the work required to continue addressing and strengthening the framework in this area. We will build on our experiences to date and appropriately take the required steps to ensure that Bermuda remains a jurisdiction of choice for quality and compliant business that positively contributes to the economic and social development of Bermuda,” he said.
In its statement, the EU Council said the list was contributing to ongoing efforts to prevent tax avoidance and promote good governance principles such as tax transparency, fair taxation or international standards against tax base erosion and profit shifting.
“The work on the EU list of non-cooperative jurisdictions is a dynamic process. The Council will continue to regularly review and update the list in 2019, whilst it has requested a more stable process as from 2020 (two updates per year),” it added.