The Council of the European Union has removed Panama and Viet Nam from its list of non-cooperative jurisdictions for tax purposes, reducing the list to eight jurisdictions. The decision was announced on 9 October and moves both countries from Annex I, the list of jurisdictions considered non-cooperative, to Annex II, where commitments and ongoing reforms are recorded.
Two different routes off the list
The changes follow separate developments in the two countries. Panama had been on Annex I since February 2020. Its move follows reform of a tax exemption regime covering certain foreign-source income. Panama has also been granted a fresh review of its compliance with international standards for exchanging tax information on request. It will remain in Annex II while that review is pending.
Viet Nam was added to Annex I in February 2026 after a review found that it did not meet the required standard for exchanging tax information on request. Following reforms, it too has been granted a new review and will be placed in Annex II until that assessment is completed. The move therefore changes the countries’ status within the EU process; it does not mean that every outstanding tax-governance commitment has been resolved.
The eight jurisdictions remaining in Annex I are American Samoa, Anguilla, Guam, Palau, Russia, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu. The Council also approved an updated state-of-play document, Annex II. Belize has been removed from that document after receiving a positive rating for its systems for exchanging tax information on request and fulfilling its commitments.
What the EU list is intended to do
The list is part of the EU’s external tax strategy. It is intended to encourage jurisdictions to meet agreed standards on tax transparency, fair taxation and measures against tax-base erosion and profit shifting. The screening process covers jurisdictions outside the EU, with the Code of Conduct Group engaging with those being assessed to help address identified shortcomings.
Annex I and Annex II serve different purposes. Annex I identifies jurisdictions that have not met the relevant standards or commitments within the required timeframe. Annex II records cooperation and commitments to reform, including cases where a review is still under way. The moves announced for Panama and Viet Nam are transfers between those categories, rather than simple removals from the EU’s monitoring process.
That distinction matters for businesses and financial institutions with cross-border activity. EU rules and national tax systems may refer to the list when applying reporting requirements or defensive measures. Depending on the measure and the country involved, these can include closer monitoring, risk-based audits, limits on deducting certain costs, controlled-foreign-company rules or withholding-tax measures. The precise approach is not identical across member states, and legal effects can depend on the relevant rule, timing and publication of the revised documents.
Next stage
The Council updates the list twice a year. The next revision is scheduled for February 2027. The formal effective date for revised annexes is tied to their publication in the Official Journal. Organisations assessing a particular transaction or disclosure obligation will need to check the applicable EU and national rules rather than assume that a status change has the same immediate effect in every jurisdiction.
The latest revision leaves eight jurisdictions on Annex I, while placing Panama and Viet Nam in the category for cooperative jurisdictions with pending commitments. Belize’s removal from Annex II is a separate outcome in the same update. Together, the changes show how the process can recognise reforms and new reviews without treating all pending tax-governance work as complete.
