EU finance ministers have made four additions to the bloc’s list of countries or territories which it defines as “non-cooperative tax jurisdictions”.
The Cayman Islands, Palau, Panama and the Seychelles were added as they failed to comply with the required standards within a deadline set by the EU.
These join the eight jurisdictions - American Samoa, Fiji, Guam, Samoa, Oman, Trinidad and Tobago, Vanuatu and US Virgin Islands - that are already on the list and, according to the EU, “remain non-compliant”.
The list was first drawn up in late 2017 in an effort to combat tax evasion and avoidance, particularly by corporations and wealthy individuals.
Under the EU process, jurisdictions are assessed against three main criteria – tax transparency, fair taxation and real economic activity.
Those that fall short on any of these criteria are asked for a commitment to address the deficiencies within a set deadline.
The EU says more than half of the territories listed in 2019 have been removed after coming into line with tax governance standards acceptable to the EU.
“Our citizens expect the wealthiest individuals and corporations to pay their fair share in tax and any jurisdiction that enables them to avoid doing that must face the consequences,” said EU Commissioner for the Economy Paolo Gentiloni. “Today's decisions show that the EU is serious about making that happen.”
As well as reputational damage, countries listed risk losing EU funding.