ECOFIN Council: Russia on EU blacklist
On February, 14 2023, the EU's Economic and Financial Affairs Council (ECOFIN), represented by EU finance ministers, decided to add Russia - among others - to the EU list of non-cooperative jurisdictions.
In addition to Russia, the British Virgin Islands and Costa Rica will also be newly included, and the Marshall Islands will be listed again (see press release dated February, 14 2023).
For jurisdictions named in the EU blacklist, the German Tax Haven Defense Reglulation stipulates, among others, stricter controlled foreign corporation rules (CFC-rules), an extension of withholding tax collection to additional income, restrictions on the application of regulations from double taxation agreements and increased obligations to cooperate. The newly listed countries will be affected from 2024 onwards, provided that the Tax Haven Defense Regulation is adapted to the new EU blacklist by the end of the year. In subsequent years, further tightening of dividend taxation and restrictions regarding business expense deductions would be added.
Note: The EU blacklist also has an impact on the reporting requirements for cross-border tax arrangements (DAC6).