The Marshall Islands, the world’s third-biggest shipping registry, has been removed from a European Union tax blacklist.
The EU’s finance ministers announced last week that the Pacific nation is no longer on a “list of non-cooperative jurisdictions for tax purposes”. The United Arab Emirates, which is increasingly used for shipping business, has been removed from the list too.
“This news has been very well received and we welcome the fact that the EU sees the Republic of the Marshall Islands as a reliable partner,” the islands’ finance minister, Brenson Wase, said.
TradeWinds reported in July that the republic, a major corporate home for shipowners, was close to being removed from the blacklist of jurisdictions that the EU regards as being uncooperative on tax.
Greek favourite
Being on the blacklist did not stop the Marshall Islands’ ship registry from becoming the second-biggest in the world. Much of that growth is due to European shipowners, particularly Greeks.
No changes to procedures for vessel registration are expected because of the decision, but Marshall Islands’ officials said entities on the islands claiming tax residency abroad would have to provide “objective evidence” as proof.
The EU decision leaves nine countries on the blacklist: American Samoa, Belize, Fiji, Guam, Oman, Samoa, Trinidad & Tobago, the US Virgin Islands and Vanuatu.
The Marshall Islands will now be moved onto a so-called Annex II of the EU’s Code of Conduct Group, which implies continued supervision of its commitments concerning exchanges of tax information on request by other countries.
“The RMI [Republic of the Marshall Islands] will maintain its engagement with the EU and other international institutions to ensure that, within its specific context and scale as a small island nation, international standards of corporate governance and taxation continue to be met,” Wase said.
By contrast, Switzerland, the country that has irked European tax authorities for the longest, is out of the woods.
After decades of acrimony and legal battles with the US and Europe that impaired its renowned bank secrecy, EU finance ministers have given Switzerland a clean bill of health, removing it from Annex II.
Albania, Costa Rica, Mauritius and Serbia have also been removed.
