EU Maintains Blacklist, Updates Grey List Commitments in October 2025 Review

What is the EU list of non-cooperative tax jurisdictions?

The European Union established the list in December 2017 as part of its external tax strategy. The purpose is to identify jurisdictions that do not meet international tax standards, and to encourage improvements through integrity, fair taxation, and effective anti-avoidance measures. They update the list twice a year, usually in February and October.

The list has two components:

• Annex I (blacklist): Jurisdictions considered non-cooperative because they have not addressed the EU’s concerns or failed to deliver on commitments.
• Annex II (grey list): Jurisdictions that have committed to reform but have not yet met all necessary criteria.

The Code of Conduct Group (Business Taxation) oversees the screening process, assessing jurisdictions on three key areas:

• Tax transparency
• Fair taxation
• Implementation of international standards, including the OECD’s Base Erosion and Profit Shifting (BEPS) measures

Annex I: The blacklist remains unchanged

In the October 2025 update, the Council confirmed that no jurisdictions were added or removed from Annex I. The 11 jurisdictions that remain on the blacklist are:

• American Samoa
• Anguilla
• Fiji
• Guam
• Palau
• Panama
• Russia
• Samoa
• Trinidad and Tobago
• U.S. Virgin Islands
• Vanuatu

These jurisdictions either have not made credible commitments to improve or have failed to implement earlier reforms. According to the Council, they “remain non-cooperative on tax matters and require further engagement”.

Being on Annex I leads to several consequences. For instance, the EU Member States apply defensive measures, including higher withholding taxes, denial of tax deductions, or stricter reporting obligations for transactions involving entities from listed jurisdictions. Additionally, the European Commission recommends limiting funding or investment flows from EU institutions to these locations.

For global entrepreneurs and service providers, any structure involving Annex I jurisdictions carries a higher risk of compliance and reputational exposure. Companies must exercise enhanced due diligence when dealing with businesses connected to these regions.

Annex II: The grey list sees new updates

While Annex I remains unchanged, the Council introduced several adjustments to Annex II, also known as the “state-of-play” document. It lists jurisdictions that cooperate with the EU and have made commitments to address identified tax deficiencies.

Jurisdictions on Annex II are considered cooperative but are still working to meet all EU tax governance requirements. Their inclusion signals progress, not penalty. The EU places these jurisdictions under monitoring rather than sanctions, allowing time to implement promised reforms. Once they complete the necessary steps, they are removed from the list.

In the October 2025 review:

• Vietnam was removed after fulfilling its commitment to implement country-by-country reporting in line with OECD standards.
• Greenland, Jordan, Morocco, and Montenegro were added following new commitments to enhance tax transparency, automatic exchange of information, and effective tax-governance frameworks.

After the October 2025 revision, Vietnam’s removal and the four new additions brought the total number of jurisdictions on Annex II to eleven:

• Antigua and Barbuda
• Belize
• British Virgin Islands
• Brunei Darussalam
• Eswatini
• Seychelles
• Türkiye
• Greenland
• Jordan
• Morocco
• Montenegro

Why the updates are crucial for businesses

The EU’s latest decision reinforces that tax governance is now central to international business strategy. Companies that operate across borders or manage global portfolios must stay alert to these changes. The October 2025 update sends three clear messages:

Compliance remains non-negotiable

The EU will continue to reward jurisdictions that meet international standards and apply pressure on those that do not. Businesses should make sure that all cross-border operations comply with OECD BEPS principles and EU tax standards.

Grey list jurisdictions are in transition

Countries like Montenegro and Morocco have committed to reform, which may open opportunities once they complete their processes. However, companies should remain cautious until the EU confirms full compliance.

Reputation and access to finance are at stake

Many financial institutions and investors now consider EU and OECD listings when evaluating risk. Companies linked to listed jurisdictions face stricter banking requirements or lower investor confidence.

Asia-Pacific perspective of progress and positioning

The 2025 update offers important insights for Asia-Pacific economies. The removal of Vietnam from Annex II marks a significant milestone for the region. It shows tangible progress in aligning with OECD standards, particularly in implementing country-by-country reporting.

This reform strengthens Vietnam’s credibility among international investors and signals Southeast Asia’s growing participation in global tax cooperation. It also sets a benchmark for other emerging economies seeking to attract foreign investment. Meanwhile, Singapore and Hong Kong continue to uphold their reputations as well-regulated jurisdictions. Neither appears on Annex I nor Annex II, reflecting full adherence to international tax standards.

Global cooperation through OECD standards

The EU’s screening process aligns with the OECD Forum on Harmful Tax Practices and its BEPS framework, which more than 140 countries now support. These initiatives seek to prevent artificial profit shifting. Profits are taxed where genuine economic activity occurs.

Through regular updates to Annex I and Annex II, the Council’s close cooperation with the OECD ensures that assessments remain consistent with global standards. This approach promotes collective progress rather than punitive isolation, allowing jurisdictions to reform under a structured timeline.

The next review scheduled for February 2026 will again assess each jurisdiction’s progress. Those that fulfill their commitments may be removed from Annex II, while those that fall behind risk being moved to Annex I.

Practical implications for global entrepreneurs

For multinational businesses and service providers, the EU list directly influences tax planning, structuring, and compliance decisions.

Key takeaways include:

• Monitor jurisdictional changes: Any company with operations, clients, or partnerships linked to listed jurisdictions should review risk exposure regularly.
• Reassess corporate structures: Consider whether existing entities remain suitable under evolving tax regulations. Relocating or consolidating operations in compliant jurisdictions may reduce long-term risk.
• Strengthen due diligence: Enhanced reporting and documentation demonstrate transparency and reduce the chance of regulatory challenges.
• Stay compliant with OECD principles: Following global standards fosters consistency with EU expectations and builds investor trust.

It’s advisable to partner with experienced service providers like BBCIncorp so your company can maintain compliance and adapt to evolving regulations with professional guidance and efficiency.

How BBCIncorp supports international companies

As part of our commitment to supporting global entrepreneurs, BBCIncorp continues to track policy updates from the EU and OECD. Our expert team has been assisting businesses in selecting jurisdictions that meet international standards, providing full support for incorporation, compliance, accounting, and ongoing management for years.

With established presences in Hong Kong, Singapore, and Delaware, BBCIncorp helps clients manage multi-jurisdictional operations through a single, secure online platform. Get in touch with our team now via service@bbcincorp.com for more detailed information on how we can support your business needs.

To conclude the updates

The EU’s October 2025 update to its list of non-cooperative tax jurisdictions demonstrates both firmness and fairness. By maintaining the blacklist and expanding the grey list, the Council continues to encourage global cooperation while rewarding jurisdictions that make progress. This balanced approach reinforces the importance of credibility in today’s interconnected economy. It also reminds global businesses that responsible tax practices are essential for credibility, access to markets, and sustainable growth.

As the next review approaches in early 2026, companies should continue to monitor developments and align their operations with internationally recognized standards. BBCIncorp stands ready to support entrepreneurs and corporate clients in navigating this evolving landscape, making certain that every business decision reflects compliance, stability, and trust.

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