On October 17, 2023, in a meeting of ECOFIN the EU Ministers of Economics and Finance decided to update the EU list of non-cooperative jurisdictions for tax purposes adopted by the Council of the European Union (so-called tax havens).
The above amendments may result in a number of tax implications, including in the scope of tax scheme reporting.
The updated list was provided in Annex I of the Council conclusions on the EU list of non-cooperative jurisdictions for tax purposes. The Council decided to include three new jurisdictions within the list, i.e. Antigua and Barbuda, Belize, as well as Seychelles. Furthermore, due to amendments introduced to local provisions, the British Virgin Islands, Costa Rica and the Marshall Islands were removed from the EU list.
Currently, the EU list of tax havens includes the following countries:
- American Samoa
- Antigua and Barbuda,
- Anguilla
- Bahamas
- Belize
- Fiji
- Guam
- Palau
- Panama
- Russian Federation
- Samoa
- Seychelles
- Trinidad and Tobago
- Turks and Caicos Islands
- US Virgin Islands
- Vanuatu
It should be noted that both the British Virgin Islands, as well as the Marshall Islands remain included on the respective Ordinances of the Minister of Finance dated 28 March 2019 on the determination of the current lists of countries and territories applying harmful tax competition in the field of corporate income tax and personal income tax.
When will a transaction with “tax havens” become a tax scheme?
Pursuant to the provisions of the Polish Tax Ordinance, in case of payments, recognised as tax deductible costs, made to a related entity with its registered office, management board or place of residence in a country applying harmful tax competition (including those indicated in the EU list of non-cooperative jurisdictions for tax purposes) a tax scheme should in principle be identified.
Notably, the prerequisite for the occurrence of a tax scheme in such a case is neither the occurrence of a tax advantage nor even an activity leading to achieving it. The value of the transaction also remains irrelevant (e.g. a transaction regarding goods worth 1 PLN may also be identified as a tax scheme).
Furthermore, it should be noted that the provisions relating to mandatory disclosure rules (i.e. reporting of tax schemes) independently define which entities should be considered as related.
Should you have any questions regarding the above-discussed issue, please do not hesitate to contact us.
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