Newsflashes

Turks and Caicos Islands and Vietnam added to EU list of non-cooperative jurisdictions for tax purposes

18 Feb. 2026 2 mn

On 17 February 2026, the Council of the EU revised the EU list of non-cooperative jurisdictions for tax purposes (EU blacklist) by adding the Turks and Caicos Islands and Vietnam, and removing Fiji, Samoa and Trinidad and Tobago.

Following this update, the EU blacklist comprises 10 jurisdictions:

American Samoa
Anguilla
Guam
Palau
Panama
Russia
Turks and Caicos Islands
US Virgin Islands
Vanuatu
Vietnam

The EU blacklist takes the form of Annex I to conclusions adopted by the ECOFIN Council, and lists jurisdictions that have failed to meet agreed international tax standards. Alongside it, Annex II serves as a state of play document, capturing those jurisdictions that have committed to implement good tax governance standards but are not yet fully compliant.

The Turks and Caicos Islands have been put back on the EU blacklist after the OECD Forum on Harmful Tax Practices identified shortcomings in how the jurisdiction enforces its economic substance rules. The jurisdiction had previously been removed from Annex I in February 2024.

Vietnam’s inclusion on the blacklist reflects an escalation in its status: the country has been subject to EU scrutiny since the very first iteration of the list in December 2017, initially featuring in Annex II. Its transfer to Annex I follows a review by the OECD Global Forum, which concluded that the country falls short of the required standards for exchanging tax information on request.

The Council of the EU has also updated the existing entries for American Samoa, Guam and the US Virgin Islands, acknowledging the steps taken by these jurisdictions towards meeting their tax cooperation commitments. That said, the progress made was deemed insufficient to justify their delisting at this stage.

The revised list becomes official upon publication in the Official Journal of the EU. The next revision is due in October 2026.

Impact on Luxembourg investment structures

While Luxembourg tax law does not include specific withholding tax provisions for (deductible) payments to entities incorporated or resident in non-cooperative jurisdictions, this latest development may still trigger various consequences affecting investment structures in Luxembourg:

Non-tax deductibility of interest and royalties due to a related party established in a country or territory on the EU blacklist (under certain conditions), unless there are valid business reasons that reflect the economic reality.
Disclosure to the Luxembourg tax authorities of intragroup transactions with non-cooperative jurisdictions on the EU blacklist.
DAC 6 – Hallmark C1 related to “cross-border transactions”: tax-deductible cross-border payments made to an associated enterprise resident in a jurisdiction on the EU blacklist are within Hallmark C1(b)(ii), which is a standalone hallmark requiring reporting of cross-border arrangements regardless of the main benefit test. The arrangements should also be monitored to ensure they do not fall under Hallmark C1(b)(i): deductible cross-border payments made to an associated enterprise resident in a jurisdiction that does not impose corporate tax, or that imposes corporate tax at a rate of zero or almost zero.

See our newsflash for more details on Luxembourg’s defensive measures against blacklisted jurisdictions.

Key takeaway

EU taxpayers carrying out transactions with related entities located in jurisdictions on the EU blacklist should assess the impact of the revised list on their operations, bearing in mind that the list is updated twice a year and must be monitored closely.

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How we can help

The Tax Law partners and your usual contacts at Arendt & Medernach are available to further assess and advise on the impact of this new measure on your investments.