Executive summary

On 17 February 2026, the Council of the European Union (the Council) held an Economic and Financial Affairs Council (ECOFIN) meeting in which Finance Ministers approved the Council Conclusions on the list of noncooperative jurisdictions for tax purposes, set out in Annex I (EU List) and the EU's overview of monitored jurisdictions, set out in Annex II, the "state-of-play overview."

Annex I has been amended to include the Turks and Caicos Islands and Vietnam and to exclude Fiji, Samoa and Trinidad and Tobago. Annex II has been amended to remove Antigua and Barbuda and Seychelles.

The Council will continue to review and update the EU List twice a year, with the next update expected in October 2026.

Detailed discussion

Background

The European Union (EU) started working on the list of noncooperative jurisdictions for tax purposes in 2016. On 5 December 2017, the Council published the first EU List (Annex I) and the state-of-play overview (Annex II). The EU List is set out in Annex I and includes jurisdictions that fail to meet the EU's criteria by the required deadline. The state-of-play overview, set out in Annex II, includes jurisdictions that have made sufficient commitments to reform their tax policies but remain subject to close monitoring while executing their commitments. Once a jurisdiction has executed all of its commitments, it is removed from the state-of-play overview.

The initial EU List included 17 jurisdictions that were deemed to have failed to meet relevant criteria established by the European Commission (the Commission) (see EY Global Tax Alert, Council of the European Union publishes list of uncooperative jurisdictions for tax purposes, dated 6 December 2017). Multiple changes have been made to the EU List since its initial release, based on recommendations from the Code of Conduct Group for Business Taxation (COCG). These changes may occur if, for example, the COCG identifies new jurisdictions or regimes or reassesses jurisdictions already on the EU List. The removal of a jurisdiction from the EU List or from the state-of-play overview is considered justified if an expert assessment establishes that the jurisdiction now meets all the conditions posed by the COCG.

The Commission also instituted the first countermeasures against listed noncooperative tax jurisdictions by adopting a Communication in March 2018 that established new requirements targeting tax avoidance in EU legislation governing, in particular, financing and investment operations (see EY Global Tax Alert, European Commission adopts first counter-measures on listed non-cooperative tax jurisdictions, dated 22 March 2018). The requirements aim to ensure that EU external development and investment funds cannot be channeled or transited through entities in jurisdictions included in the EU List without being confronted with countermeasures.

Moreover, in 2019, the Council released additional guidance on defensive measures toward noncooperative jurisdictions. Concurrently, it also released guidance on assessing jurisdictions with notional interest deduction regimes and the treatment of partnerships under criterion 2.2 (existence of tax regimes that facilitate offshore structures that attract profits without real economic activity) (see EY Global Tax Alert, EU Code of Conduct Group issues update report, including new guidance, dated 12 December 2019). In accordance with the guidance on defensive measures mentioned above, EU Member States are required, as of 1 January 2021, to use the EU List in applying at least one of four specific legislative measures:

1. Nondeductibility of costs incurred in a listed jurisdiction
2. Controlled Foreign Company (CFC) rules
3. Withholding tax measures
4. Limitation of the participation exemption on shareholder dividends

Many Member States have already adopted or drafted legislation for these defensive measures.

In October 2023, the COCG published its Multiannual work package (2023 — 2028), which mentions that the group could explore how to facilitate the proper functioning of the Pillar Two rules by making use of the EU listing process. The COCG also continues to discuss the new beneficial ownership criterion (criterion 1.4) and the extension of the geographic scope of its EU List screening process, which now encompasses approximately 95 non-EU jurisdictions.

Revised EU List (Annex I)

The Code of Conduct on Business Taxation Group proposed the following changes to Annex I, which ECOFIN adopted at its meeting on 17 February 2026:

• Turks and Caicos Islands was added following the Organisation for Economic Co-operation and Development (OECD) Forum on Harmful Tax Practices' "hard" recommendation in November 2025, which urged the jurisdiction to undertake compliance actions and apply sanctions where appropriate. The revised entry records deficiencies under criterion 2.2 (substance implementation).
• Vietnam was re-added after the Global Forum's November 2025 exchange-of-information review (EOIR) review rated it "non-compliant," triggering a listing under criterion 1.2. The entry records Vietnam's commitment to remedy country-by-country reporting (CbCR)-related deficiencies in time to be reflected in the Action 13 peer-review cycle in autumn 2027.
• Fiji was removed after signing and accepting the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC) in January 2026 and after the Forum on Harmful Tax Practices concluded in November 2025 that the relevant harmful regimes had been abolished.
• Samoa was removed following the abolition of its harmful offshore business regime in January 2026.
• Trinidad and Tobago was removed after the Global Forum upgraded its automatic exchange of information (AEOI) rating to "In place, but needs improvement" (report published 2 December 2025).
• The Council updated the Annex I entries for American Samoa, Guam and the US Virgin Islands by removing references to criterion 1.3 (legal basis for information exchange) following clarifications from the US Treasury on the legal basis for information exchange under the unamended MAC and bilateral treaties. Although these jurisdictions remain in Annex I, the Council noted measurable progress in their exchange-of-information frameworks and removed the specific references to criterion 1.3; work continues to implement effective automatic exchange of financial account information through the US treaty network and will be monitored.

The number of jurisdictions in Annex I is now 10: American Samoa, Anguilla, Guam, Palau, Panama, Russia, Turks and Caicos Islands, US Virgin Islands, Vanuatu and Vietnam.

Revised Annex II (state-of-play overview)

Annex II now lists nine jurisdictions with ongoing commitments or pending reviews across transparency, harmful regimes and BEPS Action 13 requirements: Brunei Darussalam, Belize, British Virgin Islands, Eswatini, Greenland, Jordan, Montenegro, Morocco and Turkiye.

• Antigua and Barbuda was removed from Annex II after the Global Forum issued an updated EOIR rating of "largely compliant" (January 2026).
• Seychelles was likewise removed after receiving an improved Global Forum EOIR rating of "largely compliant" (January 2026).
• Brunei Darussalam remained in Annex II and was granted a six-month extension to complete its foreign-source income exemption (FSIE) reform in full, including necessary amendments related to foreign-source capital gains, with retroactive effect from 1 January 2026.
• Turkiye remains referenced under criterion 1.1 because it has not yet established an effective AEOI relationship with one EU Member State.
• Jurisdictions with ongoing commitments related to CbCR under BEPS Action 13 (e.g., Greenland, Jordan and Morocco) remain subject to monitoring ahead of the autumn 2026 peer-review cycle.

Next steps

The Council periodically reviews and updates the EU List and the state-of-play overview, 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 EU List. Until 2019, the EU List was regularly updated without a fixed schedule to reflect the reforms undertaken by third countries. However, from 2020, Member States agreed that the lists will be updated no more than twice a year to ensure (1) a more-stable listing process, (2) business certainty and (3) that Member States can effectively apply defensive measures against listed jurisdictions. Accordingly, the next revision to the EU List is expected in October 2026.

Implications

With its listing process, the EU continues to encourage third countries to enhance transparency and remove harmful elements from their tax systems. Businesses with activities in jurisdictions listed as noncooperative should understand the implications of a jurisdiction being included in the EU List, including:

• Reporting obligations arising from the mandatory disclosure rules (MDR) contained in Directive 2011/16/EU as amended by Council Directive (EU) 2018/822 (MDR Directive or DAC6) require, in part, the disclosure of cross-border arrangements that involve cross-border deductible payments when the recipient of the payment is tax-resident in a jurisdiction included on the EU List of noncooperative jurisdictions for tax purposes.
• EU Member States may consider applying one or more defensive measures, including tax and non-tax measures, to prevent the erosion of their tax bases. These may include measures such as non-deductibility of costs, enhanced CFC rules or withholding tax measures, among others.

The lists will also have implications for public CbCR, under which information should be disclosed on a country-by-country basis and thus be disaggregated for:

• All EU Member States (likely to be expanded to the European Economic Area, consisting of the 27 EU Member States plus Iceland, Liechtenstein and Norway)
• All jurisdictions included in the EU List (on the first of March of the financial year for which the report should be drawn up)
• The state-of-play overview (on the first of March of the financial year for which the report should be drawn up for two years consecutively)

(See EY Global Tax Alert, EU Member States adopt public CbCR Directive, dated 28 September 2021.)

Further, companies cannot delay the publication of commercially sensitive information for up to five years by making use of the safeguard clause included in the public CbCR rules if the information relates to jurisdictions included in the EU List or in the state-of-play overview.

As the work of the EU COCG is a dynamic process, companies should continue to closely monitor developments, including other Member States' introduction of defensive measures toward noncooperative jurisdictions.

Appendix: Jurisdiction status as of 17 February 2026