Main results

EU list of non-cooperative jurisdictions

The Council today adopted revised conclusions on the EU list of non-cooperative jurisdictions for tax purposes.

The work on the list of non-cooperative tax jurisdictions is based on a thorough process of assessment, monitoring and dialogue with about 70 third-country jurisdictions. Since we started this exercise, 49 countries have implemented the necessary tax reforms to comply with the EU’s criteria. This is an undeniable success. But it is also work in progress and a dynamic process where our methodology and criteria are constantly reviewed.

Zdravko Marić, Croatian Deputy Prime Minister and Minister of finance

In addition to the 8 jurisdictions that were already listed, the EU also decided to include the following jurisdictions in its list of non-cooperative tax jurisdictions:

• Cayman Islands;
• Palau;
• Panama;
• Seychelles.

These jurisdictions did not implement the tax reforms to which they had committed by the agreed deadline.

Annex II of the conclusions, which covers jurisdictions with pending commitments, reflects the deadline extensions granted to 12 jurisdictions to enable them to pass the necessary reforms to deliver on their commitments. Most of the deadline extensions concern developing countries without a financial centre who have already made meaningful progress in the delivery of their commitments.

16 jurisdictions (Antigua and Barbuda, Armenia, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cabo Verde, Cook Islands, Curaçao, Marshall Islands, Montenegro, Nauru, Niue, Saint Kitts and Nevis, Vietnam) managed to implement all the necessary reforms to comply with EU tax good governance principles ahead of the agreed deadline and are therefore removed from Annex II.

European Semester

The Council adopted the following texts related to the 2020 European Semester economic policy coordination process:

The recommendation will be formally adopted by the European Council at its March meeting.

The 2020 European Semester will conclude in July with the adoption of country-specific recommendations.

Economic governance review

The Commission presented its communication on the review of EU economic governance published on 5 February.

The review assesses how effective the economic surveillance framework has been in achieving the following objectives:

• ensuring sustainable government finances and economic growth, as well as avoiding macroeconomic imbalances;
• enabling closer coordination of economic policies; and
• promoting convergence in member states’ economic performance

The cornerstones of the current setup are the six-pack and two-pack legislations which address the vulnerabilities exposed by the economic and financial crises. The economic context has evolved materially since the rules were established in 2011 and 2013 respectively.

The European economy has experienced seven years of consecutive growth. No member state is now subject to the corrective arm of the Stability and Growth Pact, the so-called “excessive deficit procedure”, compared to 24 member states in 2011.

EU budget

The Council adopted guidelines for the 2021 EU budget.

The Council considers that the next budget should ensure prudent budgeting and leave sufficient margins under the ceilings to deal with unforeseen circumstances. At the same time sufficient resources should be allocated to the implementation of the Union’s programmes and actions that contribute most towards achieving Union policies. In addition, the budget should allow commitments already made under the current MFF to be paid in due time, in order to avoid any unpaid claims.

Ministers also recommended that the European Parliament grant discharge to the Commission for implementation of the 2018 EU budget.

VAT reforms

The Council adopted two reforms of existing VAT rules.

The first reform concerns the detection of tax fraud in cross-border e-commerce transactions. The new rules will enable member states to collect, in a harmonised way, the records made electronically available by payment service providers, such as banks. In addition, a new central electronic system will be set up for the storage of the payment information and for the further processing of this information by national anti-fraud officials.

The second reform concerns VAT rules applicable to small businesses. The new rules will reduce administrative burdens and compliance costs for small enterprises and help create a fiscal environment which will help SMEs grow and trade cross-border.