The European Union removed the British overseas territory of Bermuda, the Dutch Caribbean island of Aruba and Barbados on Friday from the bloc’s blacklist of tax havens, leaving no EU territory still on the list.
The three islands were added to the list in March as they had failed for months to change their tax rules, which the EU deemed at risk of facilitating tax evasion in other countries.
But now Aruba has been removed because it has changed its legislation to make it compliant with EU requirements, an EU statement said.
Bermuda and Barbados have committed to addressing EU concerns and have therefore been moved to a so-called grey list of countries still under EU scrutiny for their tax practices, the statement said, effectively giving them more time to be fully compliant.
The blacklist has now shrunk to twelve jurisdictions, among which are the United Arab Emirates, Oman and the three U.S. territories of American Samoa, Guam, and the U.S. Virgin Islands.
Other jurisdictions on the list are Belize, Fiji, the Marshall Islands, Vanuatu, Dominica, Samoa and Trinidad and Tobago.
Blacklisted states face reputational damage and stricter controls on transactions with the EU.
The EU set up the blacklist in December 2017 after revelations of widespread tax avoidance schemes used by corporations and wealthy individuals to lower their tax bills.
The list initially comprised 17 jurisdictions, but it is subject to regular reviews. Countries with legal shortfalls are added if they do not amend their rules by set deadlines.