Russia added to the EU's 'Non-Cooperative Jurisdictions' on taxes list

By Al Mayadeen English
Source: Agencies
14 Feb 19:53

EU added Russia to the list after its taxation policy in the special region was assessed to fall short of the criteria for "good tax administration".

The border crossing between Poland and Russia's Kaliningrad Oblast is closed, in Goldap, Poland, Thursday, July 7, 2022 (AP Photo/Michal Dyjuk)

The EU Council today updated the list of jurisdictions that do not cooperate on tax issues to include Russia in addition to the British Virgin Islands, Costa Rica, and the Marshall Islands.

"The EU continues to promote fair tax competition and address harmful tax practices. The Council today decided to add British Virgin Islands, Costa Rica, Marshall Islands, and Russia to the EU list of non-cooperative jurisdictions for tax purposes," the Council said in a statement.

The statement indicates that the EU adds to the list of non-cooperative jurisdictions countries that don't adhere to "good tax administration" in their legal practices.

A committee of specialists reviewed the new Russian legislation in regard to establishing a special region for international holding companies back in 2022. Russia was added to the list after the Russian taxation policy in the offshore regions was assessed to fall short of the criteria for "good tax administration".

According to the statement, the committee determined that Russia failed to commit to its obligations to eliminate so-called problematic elements for international holding companies, citing Russia's special regime for companies.

"In addition, dialogue with Russia on matters related to taxation came to a standstill following the Russian aggression against Ukraine," the Council claimed.

Following the adoption of a set of laws intended to foster the conditions and frameworks for the return of Russian businesses and the recruitment of foreign ones from other jurisdictions, the Russian government established special administrative regions, or the so-called "Russian offshores," in 2018 which served as a regime of special administration operating in Russky and Oktyabrsky Islands (The Kaliningrad region).

Last year, the European Union and Russia had reached an agreement on the transit of goods to Kaliningrad, according to the Russian newspaper Izvestia, citing high-ranking Russian sources, who added that Brussels provided a document that "completely satisfied" Moscow.

Earlier in June, the Russian Security Council Secretary Nikolai Patrushev stated that the Russian authorities have succeeded to halt the activities of non-profit organizations in the country's northwest that received Western money, including plans to establish so-called "German autonomy" in the Kaliningrad region.

He proclaimed that the damaging activity of international non-governmental organizations and Russian non-profit organizations managed by them, which got funds from the US, the UK, Sweden, and Belgium, has ceased.