The European Union (EU) list of non-cooperative jurisdictions for tax purposes was established in December 2017 as part of its external strategy on taxation with the aim of contributing to ongoing efforts to promote tax good governance worldwide. Jurisdictions are assessed on the basis of a set of criteria established by the Council of the EU (the “Council”). These criteria cover tax transparency, fair taxation and implementation of international standards designed to prevent tax base erosion and profit shifting. On February 14, 2023, the Republic of the Marshall Islands (the “Marshall Islands”) was placed by the Council on its list of non-cooperative jurisdictions for tax purposes, listing the Marshall Islands, among others, as “attracting profits without real economic activity” and “lacking in the enforcement of economic substance requirements.”
On October 17, 2023, the Council issued a press release removing the Republic of the Marshall Islands from the list of non-cooperative jurisdictions “as it has made significant progress in enforcement of economic substance requirements”. The Registrar of Corporations of the Marshall Islands (the “RMI”) stated that it has engaged in an open, transparent dialogue with the EU and made every effort to fully clarify, enact, follow-up, and monitor the implementation of its commitments to the EU.
The RMI’s Minister of Finance, has communicated that the Marshall Islands is unequivocally committed to cooperating with the EU and fully aligning with the EU on economic substance standards.
Since 2020, the Council updates the list of non-cooperative jurisdictions twice a year. The next revision of the list is scheduled for February 2024.