After lingering on the European Union’s “Annex II” of the list of jurisdictions, commonly known as the “grey list,” for some time the British Virgin Islands is finally free of that label as the Council of the European Union on 18 February removed the BVI during their revised conclusions on the EU list of non-cooperative jurisdictions for tax purposes.

Last year it was announced that the European Union found the BVI, Bahamas and Cayman Island compliant as was referenced in a document titled Annex II “which covers jurisdictions with pending commitments.”

In its revision of the list this week the EU said that the BVI was one of 16 jurisdictions (Antigua and Barbuda, Armenia, Bahamas, Barbados, Belize, Bermuda, Cabo Verde, Cook Islands, Curaçao, Marshall Islands, Montenegro, Nauru, Niue, Saint Kitts and Nevis, Vietnam) that managed to implement all the necessary reforms to comply with EU tax good governance principles ahead of the agreed deadline and were therefore removed from Annex II.

The European Union explained on Tuesday that most commitments taken by the jurisdictions had 31 December 2019 deadlines. It was noted that the countries enacted laws which were carefully monitored at technical level by the Code of Conduct Group on business taxation until the beginning of this year. As such the EU said that the Council adopted the revised list of non-cooperative jurisdictions resulting from this exercise and endorsed a revised state of play with respect to pending commitments.

However, the organization said that this is not the end, as they will continue to monitor. “The Council will continue to regularly review and update the list in the coming years, taking into consideration the evolving deadlines for jurisdictions to deliver on their commitments and the evolution of the listing criteria that the EU uses to establish the list.”

“In parallel, as regards ‘defensive’ measures with regard to the listed jurisdictions, the Council produced a guidance on further coordination of national defensive measures in the tax area towards non-cooperative jurisdictions in December 2019. It invited all member states to apply legislative defensive measure in taxation vis-à-vis the listed jurisdictions as of 1 January 2021, with the aim of encouraging those jurisdictions’ compliance with the Code of Conduct screening criteria on fair taxation and transparency,” the EU added.

Meanwhile, Premier and Minister for Finance, Hon. Andrew Fahie announced that he was happy that the BVI was off the Annex II list. “I welcome the European Union’s recognition that the BVI fully complies with its tax good governance principles. This is as a result of close cooperation and positive dialogue with the EU and demonstrates the BVI’s commitment to meeting and surpassing international standards,” the Premier noted.

“I, along with my Government, remain completely focused on ensuring the continued success of our international business and finance centre and its role in the global economy. We believe there will be significant opportunity for our Territory and our people as we enhance our economic substance yet further,” the BVI Leader added.