CYFA Announcement #05/2023 EU list of non-cooperative jurisdictions for tax purposes

February 16, 2023

British Virgin Islands, Costa Rica, Marshall Islands, and Russia added to EU list of non-cooperative jurisdictions for tax purposes

CYFA would like to inform its members that the EU Council has decided on the 14th of February 2023 to add the British Virgin Islands, Costa Rica, Marshall Islands, and Russia to the EU list of non-cooperative jurisdictions for tax purposes. As indicated in the official EU Council Press Release, whereby the reasoning for the EU decision is outlined (click here), with the recent additions the EU tax haven blacklist now consists of 16 jurisdictions that include: American Samoa, Anguilla, the Bahamas, the British Virgin Islands, Costa Rica, Fiji, Guam, the Marshall Islands, Palau, Panama, the Russian Federation, Samoa, Trinidad and Tobago, the Turks and Caicos Islands, the U.S. Virgin Islands, and Vanuatu. As stated, the next revision of the list is scheduled for October 2023.

In terms of consequences, from a European and Cyprus tax perspective, transactions or operations with a jurisdiction that is mentioned on the EU tax haven blacklist (from the time the list is published in the Official Journal) give rise, amongst others, to the following effects:

  • EU: EU mandatory disclosure rules (DAC6): The EU DAC6 reporting obligation for intermediaries with respect to cross-border arrangements applies automatically if deductible payments are made to associated enterprises in EU-blacklisted jurisdictions.
  • Cyprus: Dividends, interest, and royalty payments made by companies that are tax residents in Cyprus to companies located in a jurisdiction that is part of the EU list of non-cooperative jurisdictions for tax purposes may be subject to a withholding tax in Cyprus (subject to conditions).

CYFA will continue to update all members of any further developments.

It is noted that each member is obliged to comply with the circulars/guidelines/announcements of the relevant authorities and regulators. Any information contained in this notification/announcement, or any other notifications/announcements or circulars should be assessed on its own merits.