On Monday, February 22, 2021, the Council of Ministers of the European Parliament adopted conclusions on the revised European Union (EU) list of non-cooperative jurisdictions for tax purposes and took the decision to add Dominica to the List of Non-Cooperative Jurisdictions.
The reason cited for this is that Dominica does not have a rating of at least “Largely Compliant”. The EU list of non-cooperative jurisdictions for tax purposes was established in December 2017. It is part of the EU’s external strategy on taxation and aims to contribute to ongoing efforts to promote tax good governance worldwide.
Jurisdictions are assessed through peer review by the Global Forum on Transparency and Exchange of Information for Tax Purposes, on the basis of a set of criteria laid down by the Council. These criteria cover tax transparency, fair taxation, and implementation of international standards, and are designed to prevent tax base erosion and profit shifting.
The list of criteria has been revised several times since 2017. In 2018, Dominica was given a “compliant” rating following its Phase I Peer Review and was removed from the EU listing. Phase II Peer Review for Dominica was conducted in October 2020 and the findings were reported to the Government on December 22, 2020.
The reviewers rated Dominica as ‘Partially Compliant”. Following receipt of the “Partially Compliant” rating, the Government requested assistance from the Global Forum Secretariat to address the deficiencies. Work with the Forum began in January 2021.
There is consensus between Dominica and the Global Forum on the way forward. At a meeting of Cabinet on Tuesday, February 23, 2021, Cabinet approved the appointment of an OECD/Global Forum Working Group comprising officials of the Ministry of Finance, the Chambers of the Attorney General, and the Ministry of National Security, to work on the implementation of the Action Plan and spearhead all other technical matters related to the OECD and Global Forum on Transparency and Exchange of Information for Tax Purposes.
That Group had already begun work with the Global Forum; however, Cabinet is of the view that their assignment should be formalized. An Action Plan has been prepared with the assistance of the Global Forum Secretariat and that Action Plan was also approved by Cabinet today.
In keeping with our commitment to ensure compliance with the European Union Code of Conduct best practices, Dominica is required to make several changes to its legislative and administrative framework which will align our domestic procedures and practices with what is required by the EU Code of Conduct Grouping on Tax Matters. Once all of the outstanding matters are addressed, Dominica will be in a position to request a Supplementary Review of its Ratings.
We are very optimistic that we will be delisted following the next meeting of the Council of Ministers of the European Parliament which is expected to be held in September 2021.