Euro Tax Flash from KPMG's EU Tax Centre

Following this latest revision Annex I of the EU list of non-cooperative jurisdictions therefore includes the following eight jurisdictions: American Samoa, Anguilla, Guam, Palau, the Russian Federation, Turks and Caicos Islands, the US Virgin Islands and Vanuatu.

In addition, the grey list now includes the following ten jurisdictions: the British Virgin Islands, Brunei Darussalam, Eswatini, Greenland, Jordan, Montenegro, Morocco, Panama, Türkiye and Viet Nam.

The EU list of non-cooperative jurisdictions, first adopted in the Council conclusions of December 5, 2017, is part of the EU’s efforts to curb tax avoidance and harmful tax practices. The list is the result of an in-depth screening of non-EU countries that are assessed against agreed criteria for tax good governance by the Code of Conduct Group (‘CoCG’ or ‘Group’), which is composed of high-level representatives of the Member States and the European Commission.

The current screening criteria are founded upon tax transparency and fair taxation principles, as well as the implementation of OECD anti-BEPS measures. Jurisdictions that do not comply with all criteria, but that have committed to reform are included in a state of play document – the so-called “grey list” or Annex II. The lists are an on-going project and are updated and revised twice every year.¹

On October 9, 2026, the Economic and Financial Affairs (ECOFIN) Council adopted conclusions on the EU list of non-cooperative jurisdictions (Annex I) and the state of play with respect to commitments taken by cooperative jurisdictions to implement tax good governance principles (Annex II).

According to the Council release and conclusions, the EU Member States adopted the following key conclusions with respect to Annex I:

• Anguilla remains listed on Annex I with reference to criterion 2.2² (no facilitating offshore structures). However, the entry in relation to criterion 1.2³ (Exchange of information on request – EOIR) was amended. Previously, the list included a reference to Anguilla having committed to addressing deficiencies with regard to its EOIR framework and to requesting an in depth review from the Global Forum before July 24, 2026. The updated list does not refer to a commitment and instead notes that Anguilla does not have a rating of at least ‘Largely Compliant’ by the Global Forum.
• Panama was moved from Annex I to Annex II. The entry in respect of criterion 2.1⁴ (no harmful preferential tax measures) was removed following the reform of Panama’s foreign-source income exemption (FSIE) regime in line with the CoCG FSIE guidance. At the same time, the previous commitment to undergo an in-depth EOIR review by the Global Forum was recorded in section 1.2 of Annex II.
• Vanuatu remains listed on Annex I with respect to criterion 2.2. However, the entry in relation to criterion 1.2 was removed following the publication of a Global Forum supplementary review on April 29, 2026, under which the country was rated "largely compliant".
• Viet Nam was moved from Annex I to Annex II in respect of criterion 1.2 after the Global Forum’s decision to grant Viet Nam an in-depth review (following its "non-compliant" rating in the 2025 EOIR peer review process). In addition, the previous commitment to address the 2025 BEPS Inclusive Framework peer review report recommendations on parts B(1) and B(2) of the country-by-country reporting (CBCR) terms of reference was recorded in section 3.2⁵ of Annex II.

Following this latest revision Annex I of the EU list of non-cooperative jurisdictions therefore includes the following eight jurisdictions: American Samoa, Anguilla, Guam, Palau, the Russian Federation, Turks and Caicos Islands, the US Virgin Islands and Vanuatu.

The ECOFIN Council adopted the following additional changes with respect to Annex II:

• Belize was removed from section 1.2 of Annex II (and therefore removed completely from the grey list) after Belize received a rating of “largely compliant” in the Global Forum EOIR peer review.
• Brunei Darussalam remains in section 2.1 of Annex II after being granted an extension until December 22, 2026, to complete the legislative reform of its harmful foreign-source income exemption (FSIE) regime.
• Montenegro remains in section 1.2 of Annex II after being granted an in-depth review by the Global Forum on exchange of information on request (EOIR) in July 2026.
• Türkiye remains in section 1.1⁶ (automatic exchange of information) of Annex II. The Council conclusions note that Türkiye is still not fully in line with the commitments required in connection with the exchange of information with all Member States (Türkiye does not currently exchange data with Cyprus).
• The grey list now includes the following ten jurisdictions: the British Virgin Islands, Brunei Darussalam, Eswatini, Greenland, Jordan, Montenegro, Morocco, Panama, Türkiye and Viet Nam.

The revision will take effect from the day of publication in the Official Journal of the European Union of the revised Annexes I and II. The next update of the EU list of non-cooperative jurisdictions is expected to take place in February 2027.

It is important for taxpayers to monitor the evolution of the list in light of defensive measures applied by EU Member States against listed jurisdictions in form of e.g., non-deductibility of costs, CFC rules, increased WHT or limitation of participation exemption. Taxpayers should be mindful that EU countries may refer to different (local) lists and apply different defensive measures, based on different application timelines, and have other varying requirements in this context. Please access our summary of  how EU Member State apply defensive measures against non-cooperative jurisdictions for tax purposes.

Notably, the CoCG is in the process of conducting an in-depth follow-up review of how Member States apply the measures in practice and whether they meet the Group’s expectations in terms of efficiency. This additional investigation would offer the CoCG an overview of the practical impact of the defensive measures and could serve as a starting point for potential additional guidance to better coordinate existing measures as well as to introduce new types of defensive measures.

In parallel, the European Commission has issued the Tax Omnibus proposal in June 2026, which includes a proposal to remove withholding taxes on intra-EU payments of dividends, interest and royalties, coupled with a safeguard clause to ensure that interest and royalty payments are subject to taxation at least once. The proposal requires Member States to either levy a withholding tax on interest and royalty payments or deny their deductibility where the recipient of the payment is established in a non-EU jurisdiction that does not levy corporate income tax or applies a nominal zero tax rate to interest and royalty income. This safeguard would generally not apply to groups already subject to the global minimum tax, subject to certain complex limitations for US headquartered groups. Please access Euro Tax Flash Issue 582 for more information on the Tax Omnibus proposal.

The EU list of non-cooperative jurisdictions is also relevant for the purposes of the EU mandatory disclosure rules under DAC6, where recipients of cross-border payments are resident for tax purposes in a jurisdiction that is included in Annex I. Under Hallmark C1b(ii) of DAC6, such payments may trigger a reporting obligation irrespective of whether the transaction is aimed at generating a tax benefit (i.e., the main benefit test does not apply). Note that consensus has not formed among Member States on the point in time at which the list should be tested (e.g., the triggering date, or the reporting date).

In addition, the EU list has a direct impact on EU Public Country-by-Country Reporting obligations that generally apply in relation to financial years starting on or after June 22, 2024 (exceptions apply). Based on the EU Public Country-by-Country Reporting Directive, relevant data points should be made publicly available on a country-by-country basis for each EU Member State as well as for each jurisdiction listed on Annex I of the EU list of non-cooperative jurisdictions and for each jurisdiction that has been on the grey list (Annex II) for a minimum of two years (i.e. as opposed to disclosure of aggregated amounts, which is the requirement for the rest of non-EU jurisdictions). Please access our dedicated EU public CbCR webpage for more information.

The EU list also impacts the FASTER Directive that aims to establish two fast-track procedures complementing the existing standard refund procedure in each Member States. The fast-track withholding tax procedure will be facilitated by so-called Certified Financial Intermediaries (CFIs) that will be subject to additional due diligence and common reporting requirements. Financial intermediaries established outside the EU may apply for registration as a CFI provided that the third country of residence is neither on (i) Annex I of the EU list of non-cooperative jurisdictions, nor (ii) on the EU list of high-risk third countries (anti-money laundering list (subject to certain additional conditions).

The EU list further produces effects outside the tax area, such as in respect of EU Regulation 2021/557, which provides that securitization special purpose entities (SSPEs) should only be established in third countries that are not listed in Annex I of the EU list, or in the list of high-risk third countries which have strategic deficiencies in their regimes on anti-money laundering and counter terrorist financing. 

Should you have any queries, please do not hesitate to contact KPMG’s EU Tax Centre or, as appropriate, your local KPMG tax advisor.