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Guidelines preventing use of blacklisted tax jurisdictions.
The European Commission has published guidelines aimed at stopping the transit of EU funds through blacklisted tax jurisdictions. Among the measures is one to establish that there are sound business reasons for how a project is structured that do not take advantage of the technicalities of a tax system or of mismatches between two or more tax systems to reduce a tax bill.
There is an exception for direct financing when a project is physically implemented in a listed non-co-operative tax jurisdiction but is not linked to money-laundering, terrorism financing, tax fraud or tax evasion.
The commission is encouraging member states to agree on sanctions to apply at national level against the listed jurisdictions. Countries have already agreed on a set of countermeasures that they can apply, including increased monitoring and audits, withholding taxes, special documentation requirements and anti-abuse provisions.
