The European Union will eliminate Aruba, Bermuda and Barbados from its tax haven blacklist because they are changing their corporate tax laws.
EU finance ministers will approve the removal at a meeting on May 17, based on documents obtained by Bloomberg News.
Under the EU’s fair corporate tax criteria, a company should have “economic substance” in the relevant territory, and must not be a letterbox firm that has been set up to take advantage of low or zero corporate tax rates.
According to the EU document, Bermuda changed its laws relating to “economic substance in the area of collective investment funds by the end of 2019.” Bermuda will be transferred to the EU gray list until the island nation carries through on its commitments.
Barbados will also be moved from the blacklist to the gray list to ensure that similar “economic substance” requirements are adopted by the end of 2019, the document said.
The Caribbean island nation of Dominica also changed its laws but it still does not comply with EU “transparency” criteria that require the exchange of bank information of non-resident account holders, according to the document. As a result it will remain on the EU tax haven blacklist.
The EU finance ministers on May 17 are due to confirm that 12 countries will remain on the EU tax haven black list: American Samoa, Belize, Dominica, Fiji, Guam, Marshall Islands, Oman, Samoa, Trinidad and Tobago, United Arab Emirates, U.S. Virgin Islands and Vanuatu.