Council of the
European Union
Brussels, 6 March 2020
(OR. en)
13950/17
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FISC 250
ECOFIN 904
DECLASSIFICATION
of document:
13950/17
dated:
6 November 2017
new status:
Public
Subject:
State of play of the process leading to establishment of the EU list of non-
cooperative jurisdictions for tax purposes
Delegations will find attached the declassified version of the above document.
The text of this document is identical to the previous version.
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Council of the European Union
General Secretariat
Brussels, 6 November 2017
(OR. en)
13950/17
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FISC 250
ECOFIN 904
NOTE
From:
Presidency
To:
Delegations
Subject:
State of play of the process leading to establishment of the EU list of non-
cooperative jurisdictions for tax purposes
1.
The ECOFIN Council, in its Conclusions of 25 May 2016 on an “External Strategy for
Effective Taxation and Commission Recommendation on the implementation of measures
against tax treaty abuse" invited “
the Code of Conduct Group to start work […], with a view
to establishing an EU list of non-cooperative jurisdictions and exploring defensive measures
at EU level to be endorsed by the Council in 2017. Those defensive measures could be
considered to be implemented in the tax as well as in the non-tax area."
1.
2.
In its 8 November 2016 Conclusions
2 the Council set out the criteria on tax transparency, fair
taxation and implementation of anti-BEPS standards, as well as the guidelines for the process
of screening jurisdictions with a view to establishing an EU list of non-cooperative
jurisdictions for tax purposes.
1
Doc. 9452/16 FISC 85 ECOFIN 502, point 10.
2
The official publication of these Council Conclusions can be found in the
Official Journal of
the European Union: OJ C 461, 10.12.2016, page 2.
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3.
Since then, the Code of Conduct Group (Business Taxation) (COCG) and Council Presidency,
chairing the Code of Conduct Group subgroup on third countries
3 have worked intensely on
this dossier.
4.
The COCG, in line with the mandate (the Guidelines
4) by the Council, finalised the
preparatory work, launched an assessment ("screening") exercise on a number of jurisdictions
on the basis of the Commission's Scoreboard, and invited these jurisdictions to engage in the
process of analysis of their tax systems against the criteria, set out in the Council conclusions
of 8 November 2016, concerning the areas of tax transparency, fair taxation and
implementation of anti-Base Erosion and Profit Shifting (anti-BEPS) measures.
5.
The expert panels, set up by the COCG, have conducted the “screening” on the basis of the
publically available sources as well as information provided by the jurisdictions concerned, as
most of the jurisdictions chose to engage in this process and respond to the queries by the
COCG experts.
6.
In October 2017, in line with point 7 of the Guidelines, the expert panels presented the
outcome of this work to the COCG, in the form of individual jurisdiction sheets, containing
factual information, pertinent to the screening criteria, as well as the draft recommendations to
address the deficiencies identified.
5
3
Doc. 6674/16 FISC 33 ECOFIN 189.
4
See doc. 14166/16, point 7 of the "Guidelines for the process of screening of jurisdictions
with a view to establishing an EU list of non-cooperative jurisdictions for tax purposes" (as
endorsed by ECOFIN of 8 November 2017)
5
Doc. 12831/17 EU RESTRICTED; doc. 12939/17 EU RESTRICTED; doc. 13015/17
EU RESTRICTED; doc. 13182/17 EU RESTRICTED; doc. 13235/17 EU RESTRICTED.
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7.
At its meeting of 17 October 2017 the COCG endorsed this analysis and agreed that letters
should be sent to all jurisdictions concerned to inform them of the results of this work and,
where relevant, seek high level political commitment from the jurisdictions to address the
identified concerns.
8.
The COCG also reached agreement on the templates, which are the basis of the letters to be
sent to all the jurisdictions that were screened, including those where no issue was determined
by the COCG, as well as to the jurisdictions where concerns were found and from which
commitments to address these concerns should be sought. The letters are signed by the Chair
of the COCG.
9.
Letters seeking for high level political commitment to address the concerns determined by the
COCG were sent
6 to the jurisdictions concerned setting a deadline for replies at 17 November
2017.
10. Notably, an important part of the work of COCG evolved around the screening criterion 2.2
("
the jurisdiction should not facilitate offshore structures or arrangements aimed at attracting
profits which do not reflect real economic activity in the jurisdiction."). The scope of this
criterion was further specified by the COCG, as mandated by the Council, specifically on how
the absence of a corporate tax or applying a nominal corporate tax rate equal to zero or almost
zero by a jurisdiction should be assessed, while the Council has also agreed that the absence
of a corporate tax or applying a nominal corporate tax rate equal to zero or almost zero can
not alone be a reason for concluding that a jurisdiction does not meet the requirements of
criterion 2.2.
6
The relevant parts of these letters sent out to jurisdictions, setting out the commitments
sought by the Code of Conduct Group are reproduced in the Annex I to doc. 13890/17
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11. Work on template letters to jurisdictions concerned by the analysis under criterion 2.2 and/or
those affected by natural disasters (September 2017 tropical storms) was completed by the
COCG Subgroup, chaired by the Presidency
7 and these letters are in the process of being sent.
12. The COCG agreed to put on hold the screening process to the jurisdictions that were affected
by natural disasters. The letters will nevertheless clarify that these jurisdictions will be asked
to address the concerns identified as soon as the situation improves, with the view to resolving
these concerns by the end of 2018. By February 2018, the COCG will therefore contact these
jurisdictions to prepare the next steps of co-operation.
13. Jurisdictions where concerns with regard to criterion 2.2 were determined are being invited to
discuss with the COCG what further steps could be taken to ensure that businesses have
sufficient economic substance.
14. In view of the Presidency, a clear message is conveyed to the jurisdictions concerned that they
are expected to make concrete progress in the areas where the concerns were identified and
that only appropriate solutions that will solve the problem identified can be considered
adequate. The substance requirement will be a central part in the discussions with them,
although not limited to it. The individual discussions with each jurisdiction concerned should
indeed take up all specific problems that were identified by the COCG as well as Member
States and address them in a clear manner.
15. As a next step, on the basis of the State of play endorsed by the ECOFIN Council on
21 February 2017
8, following a balanced review of all information collected in the screening
process, the COCG has to report to the Council on those jurisdictions that do not comply with
the screening criteria which, in the view of the COCG, the Council would decide, as
appropriate, to include in the list of non-cooperative jurisdictions. It is noted that this decision
will be taken by consensus.
9
7
See doc. 13949/17 FISC 249 EU RESTRICTED.
8
Doc. 6325/17 FISC 45 ECOFIN 93 LIMITE
9
Doc. 10397/17 FISC 141 ECOFIN 551 CO EUR-PREP 32, paragraph 90.
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16. This report is expected to be presented, in co-ordination with the High Level Working Party
on Tax Questions, to the Council in due time, so that the EU list of non-cooperative
jurisdictions could be endorsed by the Council by the end of 2017 (as resolved in the Council
Conclusions of 8 November 2016).
10
17. The Presidency is also continuing its work on the draft of the Council conclusions on the EU
list of non-cooperative jurisdictions for tax purposes.
11 The draft text, which provides the
framework for setting out the EU list, the defensive measures in non-tax area
12 and outlines
the principal aspects of further work on how the commitments of jurisdictions to comply with
the screening criteria should be monitored. Essentially, a couple of issues remain to be
resolved in the run up to December 2017 ECOFIN meeting: whether Member States could
agree on a political commitment to co-ordinate, to a certain degree, tax measures to be taken
towards listed jurisdictions and whether a registry of jurisdictions which committed to resolve
the concerns determined by the COCG should be public.
18. The Presidency holds an optimistic view that these open issues are going to be solved in time
for ECOFIN Council reaching an agreement at its December 2017 meeting, so that the work
on the EU list of non-cooperative jurisdictions for tax purposes is completed within the agreed
timeline.
10
Doc. 10397/17 FISC 141 ECOFIN 551 CO EUR-PREP 32, paragraph 91.
11
The latest text is set out in doc. 13228/17 FISC 223 EU RESTRICTED.
12
While exploring options for defensive measures to be considered in non-tax area,
delegations took note of the ongoing negotiations on a number of EU legislative files
(2016/0275 (COD); (2016/0276 (COD); (2016/0282 (COD), (2016/0107(COD)), where, in
certain provisions, a link with the future common list of non-cooperative jurisdictions could
be designed, if an agreement on a compromise text is reached by all parties to negotiations
in the relevant fora.
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19. The dialogue with relevant jurisdictions to promote tax transparency, fair taxation and
implementation of anti-BEPS standards and the process of promoting the standards in the
areas of tax transparency, fair taxation and implementation of anti-Base Erosion and Profit
Shifting (anti-BEPS) measures will continue and the COCG will act in co-ordination with the
work of the Global Forum on Transparency and Exchange of Information for tax Purposes,
the OECD Inclusive Framework for Tackling Base Erosion and Profit Shifting, and of the
Forum on Harmful tax Practices.
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