The European Union has given Turkey until the end of June to fulfill its commitment to activate a tax information exchange system with all member states of the bloc, or otherwise threatens to include the country in the ‘black’ list of tax havens.
This is stated in the new update of list of non-cooperative jurisdictions in tax matters, from which Barbados has left but in which Dominica has entered. The document, therefore, continues to be made up of twelve territories, which are American Samoa, Anguilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the American Virgin Islands and Vanuatu.
The changes received last week the approval of the 27 Finance Ministers (Ecofin) and have been formally approved this Monday at the meeting of their foreign counterparts at a point without discussion.
As the economic managers agreed then, Turkey will remain on the ‘gray’ list despite not having yet fulfilled their commitment to guarantee exchanges of tax information to all EU Member States.
Ankara had to meet this requirement no later than December 31, 2020, but the Twenty-Seven agreed to give Turkey additional time to resolve deficiencies identified by European partners. In particular, Turkey will have to have activated an automatic tax information exchange system with the 27 Member States by June 30, 2021 at the latest.
In the document, the EU regrets that Turkey has only activated this system with 21 countries of the bloc. Consequently, it requires Ankara to initiate a “high-level” dialogue with the remaining six partners and to agree to the exchange of tax information before the end of June.
Thus, Turkey will have to send to the 27 Member States the tax information required for the fiscal year 2021 “no later than September 1, 2021”. In addition, the relevant data for fiscal years 2020 and 2021 will have to be sent in accordance with the schedule set by the OECD and “in no case later than September 30, 2021 and September 30, 2022, respectively.”