If the US does not comply with the OECD Common Reporting Standard by June next year it faces being placed on the EU blacklist for non-cooperative jurisdictions, an EU top official has warned. The EU’s head of direct taxation Valere Moutarlier told a European Parliament tax investigative committee that the US has until June 2019 to adopt the Organisation for Economic Cooperation (OECD) common reporting standard (CRS), according to a report by Bloomberg Tax.
On the clock
When questioned by several EU lawmakers about why the US was not already on the blacklist, Moutarlier said: “We have transparency criteria that is very clear that the June 2019 deadline must be respected.”
Additionally, he noted that the US tax reforms brought in under president Donald Trump have already been referred to the OECD for Harmful Tax Practices, as it “raises new corporate tax issues”.
The EU requested that the reforms be reviewed as it is considering whether the US should be placed on the EU tax haven blacklist, according to a confidential letter seen by Bloomberg Tax.
The EU is currently writing up a list of sanctions for blacklisted countries, which will be finalised by the end of 2018.
On 18 May, the EU confirmed the Bahamas and St Kitts & Nevis were set to be removed from the blacklist.
The removal of the two jurisdictions means American Samoa, Guam, Namibia, Palau, Samoa, Trinidad and Tobago and the US Virgin Islands are the only jurisdictions left on the list.
At its peak, when it was first released on 5 December 2017, the list contained 17 jurisdictions.
US hits back
In January, the US Treasury Department sent a strongly worded letter to the EU saying the blacklist “undermines” international standards put in place to identify non-cooperative tax jurisdictions.
The letter, written by US Treasury secretary Steven Mnuchin, says: “The US disagrees with the [EU] Council’s decision to subject non-EU jurisdictions to a separate review process and to release its own list of ‘non-cooperative jurisdictions’ for tax purposes.”