Belize and Antigua and Barbuda have just been blacklisted as tax havens by the European Union!

So, the European Union recently announced that it’s added Antigua and Barbuda, Belize and the Seychelles, to its list of non-cooperative tax jurisdictions. 

The inclusion of Antigua and Barbuda and Belize means almost half of the EU’s blacklisted territories are in the Caribbean. The other Caribbean territories on the list are Anguilla, the Bahamas, Trinidad and Tobago, and Turks and Caicos. 

Now, I don’t want you to get confused. The EU’s blacklist is different from the Financial Action Task Force’s blacklist that we’ve been talking about for a few months. That one is for countries that aren’t taking strong enough measures to prevent money laundering and terrorism financing.  Jamaica’s on the greylist for that one.

The EU’s blacklist is for countries that they consider to be tax havens. 

A tax haven is a country where foreign businesses and individuals pay little or no taxes for their bank deposits. Companies and wealthy people may use tax havens to legally stash money earned abroad while avoiding higher taxes in the US and other nations.

Tax havens may also be used illegally to hide money from tax authorities at home.  In recent times, tax havens are under increasing international political pressure to cooperate with foreign tax fraud inquiries.

Being on the EU’s blacklist affects doing business with its 27 member countries. Blacklisted countries are taxed higher than others, which discourages companies from doing business with them. Plus, there’s the reputational damage, you know, the stigma of being blacklisted.

Now, Belize’s Government has come out to say they reject being added to the list because the EU assessment relied on outdated information. But that’s literally the reason the EU gave for them being added to the list in the first place.

The EU said that the new countries on the list failed to provide enough tax information on request.

But according to the Belizean Government, it gives the appearance that they’re not committed to strengthening their tax framework.

The Government said they’ve already taken significant steps to address the deficiencies that the EU had identified in their tax laws – but again that info wasn’t given to the EU’s council. So they’re working on a better procedure to exchange information with the EU to avoid another situation like this.

Now, Belize can submit a request for a supplementary review, which could get them off the list sooner. But the Government said the earliest they can submit that is July 2024. 

Meanwhile, Antigua and Barbuda’s government is calling the move a bullying tactic. Information Minister Melford Nicholas said it’s unfair that small island states are always having to amend their laws to meet these international regulations. 

The Minister also said that pressure to adapt to international standards has wiped out the offshore banking sector in countries like Antigua.

But, since it is what it is, the minister said whatever issues caused the country to be placed on the EU blacklist will be corrected soon. 

So, for now Belize and Antigua and Barbuda will have to stay on the blacklist… and that’s the bottom line.