If you are weighing where to incorporate a holding company or route cross-border payments, the EU tax blacklist is the first list you should check, because being on it triggers concrete penalties across all 27 member states. As of the 17 February 2026 update, the blacklist — formally Annex I of the EU list of non-cooperative jurisdictions — names 10 countries and territories: American Samoa, Anguilla, Guam, Palau, Panama, the Russian Federation, the Turks and Caicos Islands, the US Virgin Islands, Vanuatu and Viet Nam (KPMG, 2026).
Sitting alongside it is a second, softer list. The greylist — Annex II, officially the "state of play" — contains jurisdictions that have not met the EU's tax good-governance standards but have given written commitments to reform. After the February 2026 review, the greylist holds 9 jurisdictions (KPMG, 2026). The practical difference matters: blacklisted countries face automatic defensive measures, while greylisted ones are on a watch-and-wait timeline.
This guide walks through both lists in full, the three criteria used to screen every jurisdiction, what EU member states actually do to blacklisted countries, and what changed in February 2026. Read it before you structure anything through a low-tax jurisdiction — the cost of guessing wrong is paid in withholding tax and lost deductions.
TL;DR: The EU tax blacklist (Annex I) names 10 non-cooperative jurisdictions as of 17 February 2026, while the greylist (Annex II) names 9 committed jurisdictions (KPMG, 2026). Blacklisting triggers mandatory defensive measures in all member states; greylisting is a reform timeline, not yet a penalty.
What is the EU tax blacklist and how is it different from the greylist?
The EU list of non-cooperative jurisdictions was established in 2017 as part of the bloc's external taxation strategy, splitting into two annexes (European Commission, 2026). Annex I — the blacklist — names jurisdictions that failed or refused to meet tax good-governance criteria. Annex II — the greylist — names those that fell short but committed to fix the problems within agreed deadlines.
The distinction is not cosmetic. A blacklisted jurisdiction faces both reputational damage and binding legal consequences inside the EU, because member states are obliged to apply tax defensive measures against it. A greylisted jurisdiction is essentially on probation: the EU is monitoring whether it delivers on its promises, and no automatic penalties apply while the commitment stands.
Both lists are reviewed and adopted by the Council of the EU, the institution representing member-state governments. The criteria draw directly on international standards — the OECD Global Forum on transparency and the OECD/G20 BEPS Inclusive Framework — so the EU is not inventing its own benchmarks so much as enforcing global ones with regional teeth.
Key takeaway: Blacklisting (Annex I) brings mandatory defensive measures across all 27 EU states; greylisting (Annex II) is a reform timeline with monitoring but no automatic penalties.
Which jurisdictions are on the 2026 EU blacklist (Annex I)?
The February 2026 blacklist contains exactly 10 jurisdictions, spanning Pacific territories, Caribbean financial centres, and two larger economies (KPMG, 2026). The list is shorter than in some earlier years, reflecting jurisdictions that either reformed or made fresh commitments. Several names will be familiar to anyone who follows offshore structuring.
Here is the complete Annex I as adopted on 17 February 2026:
| # | Blacklisted jurisdiction (Annex I) | Region |
|---|---|---|
| 1 | American Samoa | Pacific |
| 2 | Anguilla | Caribbean |
| 3 | Guam | Pacific |
| 4 | Palau | Pacific |
| 5 | Panama | Central America |
| 6 | Russian Federation | Europe/Asia |
| 7 | Turks and Caicos Islands | Caribbean |
| 8 | US Virgin Islands | Caribbean |
| 9 | Vanuatu | Pacific |
| 10 | Viet Nam | Southeast Asia |
Source: KPMG EU Tax Centre, 2026.
Two of these are worth flagging for structuring purposes. Panama remains a long-standing fixture on the list despite repeated reform efforts, and Vanuatu — a popular citizenship-by-investment and zero-tax base — sits firmly in Annex I too. The US Virgin Islands appears alongside its sister US territories, American Samoa and Guam. You can review the tax profiles of each on our jurisdictions directory.
What changed in the February 2026 update?
The 17 February 2026 update was a net reshuffle rather than an expansion. The Council added two jurisdictions to the blacklist and removed three, leaving Annex I one entry shorter than before (Deloitte, 2026). The changes follow the EU's twice-yearly review cycle, with the next revision scheduled for October 2026 (KPMG, 2026).
Additions to the blacklist
Two jurisdictions joined Annex I, each for a specific failing. The Turks and Caicos Islands was added for a lack of enforcement of its economic substance requirements, while Viet Nam was added for non-compliance with exchange-of-information standards (Deloitte, 2026). The reasons illustrate how the criteria bite in practice: it is not enough to have substance rules on paper if enforcement is weak.
Removals from the blacklist
Three jurisdictions left Annex I in February 2026 — Fiji, Samoa, and Trinidad and Tobago (Deloitte, 2026). Their departure reflects either completed reforms or new commitments accepted by the Council. The movement underlines a practical point: the list is dynamic, and a jurisdiction's status can flip in either direction at each six-month review.
[UNIQUE INSIGHT] The February 2026 pattern — substance enforcement and information exchange driving both additions — tells you where the EU's attention now sits. The transparency and "paper substance" battles of the late 2010s have matured into enforcement scrutiny. Jurisdictions that legislated substance rules but under-resourced their regulators are increasingly the ones getting caught.
Which jurisdictions are on the 2026 EU greylist (Annex II)?
The February 2026 greylist holds 9 jurisdictions that have formally committed to reforming flagged shortcomings within EU-agreed timelines (KPMG, 2026). Annex II is the more fluid of the two annexes, with jurisdictions cycling on and off as commitments are made and met. Membership signals scrutiny, not yet sanction.
The complete Annex II as of February 2026:
| # | Greylisted jurisdiction (Annex II) | Region |
|---|---|---|
| 1 | Belize | Central America |
| 2 | British Virgin Islands | Caribbean |
| 3 | Brunei Darussalam | Southeast Asia |
| 4 | Eswatini | Southern Africa |
| 5 | Greenland | North Atlantic |
| 6 | Jordan | Middle East |
| 7 | Montenegro | Balkans |
| 8 | Morocco | North Africa |
| 9 | Türkiye | Europe/Asia |
Source: KPMG EU Tax Centre, 2026.
The greylist saw movement in February 2026 too. Antigua and Barbuda and the Seychelles were both removed after fulfilling their commitments, following positive reviews by the OECD Global Forum on exchange of information (Seychelles Ministry of Finance, 2026). Brunei Darussalam, by contrast, was granted a six-month extension to reform its foreign-source income exemption regime, after which it may also exit Annex II (Deloitte, 2026).
For structuring, the greylist deserves a closer read than its softer reputation suggests. The British Virgin Islands and Montenegro both appear here, and a greylisted jurisdiction can be promoted to the blacklist if it misses its deadline. A jurisdiction that exited the greylist, like the Seychelles, generally carries less list-related risk going forward.
What are the three screening criteria?
Every jurisdiction is assessed against three families of standards, and failing any one can land it on a list (European Commission, 2026). The criteria mirror the global frameworks the EU helped build: the OECD Global Forum on transparency and the OECD/G20 BEPS Inclusive Framework. None of them is about tax rates as such — a zero-tax jurisdiction can pass if it is transparent and cooperative.
Tax transparency
The first pillar tests whether a jurisdiction exchanges tax information to international standards. That means signing up to automatic exchange of financial-account information, providing exchange on request, and meeting the OECD Global Forum's benchmarks. Viet Nam's February 2026 addition was driven precisely by a failure here — non-compliance with exchange-of-information standards (Deloitte, 2026).
Fair taxation
The second pillar checks for harmful preferential tax regimes — ring-fenced incentives that benefit foreign investors but lack genuine economic activity. Zero-tax jurisdictions are also expected to enforce economic substance requirements, so that companies claiming residence actually conduct real activity there. The Turks and Caicos Islands was blacklisted in February 2026 for failing to enforce exactly these substance rules (Deloitte, 2026).
Anti-BEPS implementation
The third pillar asks whether a jurisdiction has implemented the OECD/G20 measures against base erosion and profit shifting — at minimum, the BEPS minimum standards, including country-by-country reporting and anti-treaty-abuse rules (European Commission, 2026). Joining the BEPS Inclusive Framework and following through on its commitments is the practical test. Falling behind here is a common route onto Annex II.
What defensive measures do EU states impose on blacklisted jurisdictions?
This is where blacklisting stops being symbolic. Under 2019 Code of Conduct Group guidance, each member state must apply at least one of four legislative defensive measures against Annex I jurisdictions, and many apply more (KPMG, 2026). The four agreed measures attack the tax efficiency of routing money through a listed jurisdiction from different angles.
The four legislative defensive measures are:
| Measure | What it does |
|---|---|
| Non-deductibility of costs | Payments to a listed jurisdiction are denied as a tax deduction |
| CFC rules | Profits of a controlled entity in a listed jurisdiction are taxed currently in the EU parent's hands |
| Withholding tax | Higher or punitive withholding applies to payments flowing to a listed jurisdiction |
| Participation exemption limit | Dividends from a listed jurisdiction lose the usual exemption on profit distributions |
Source: KPMG EU Tax Centre, 2026.
Coverage is universal and often layered. All EU member states apply at least one of the four measures against Annex I jurisdictions, and 18 member states apply at least two (KPMG, 2026). That layering is what makes blacklisting costly in practice: a single structure can be hit by non-deductibility in one country and punitive withholding in another.
[UNIQUE INSIGHT] The participation-exemption limitation is the quiet killer for holding-company structures. A holding company in a member state normally receives subsidiary dividends tax-free; lose that exemption because the subsidiary sits in a blacklisted jurisdiction, and the entire rationale for the structure collapses. This is why list status, not headline tax rate, often decides where a holding company can live. Model the impact on our compare tool before committing.
How does the EU list affect your structuring decisions?
The blacklist should function as a screening filter at the very start of any cross-border plan. Beyond the four mandatory defensive measures, listing also feeds into EU reporting rules such as DAC6 and influences how banks and counterparties assess a structure (European Commission, 2026). A jurisdiction's low rate means little if EU partners apply withholding tax and deny deductions on every payment to it.
[PERSONAL EXPERIENCE] In reviewing proposed structures, the most common avoidable mistake we see is choosing a jurisdiction for its zero rate without checking its annex status first. A founder routing licensing income through a blacklisted territory can end up worse off than if they had used a transparent, treaty-rich country at a higher headline rate, once non-deductibility and withholding stack up.
The practical workflow is straightforward. Check whether a candidate jurisdiction sits on Annex I or Annex II, factor the relevant member-state defensive measures into your model, and watch the six-month review cycle, since the next update lands in October 2026 (KPMG, 2026). Use our jurisdiction profiles to compare rates and substance requirements, and read related explainers on the blog before you decide.
Frequently asked questions
Does being on the EU greylist trigger penalties?
Not automatically. The greylist (Annex II) names jurisdictions that have committed to reforms within agreed timelines, so monitoring applies rather than the mandatory defensive measures reserved for the blacklist (European Commission, 2026). The risk is forward-looking: a greylisted jurisdiction that misses its deadline can be moved to Annex I, where penalties do apply.
How often is the EU tax list updated?
Twice a year. The Council reviews and updates the list of non-cooperative jurisdictions on a six-month cycle; the most recent update was adopted on 17 February 2026, and the next revision is scheduled for October 2026 (KPMG, 2026). Because status can change at each review, check the current annexes before relying on any structure.
Why is Panama still on the EU blacklist?
Panama remains in Annex I as of the February 2026 update, where it has been a long-standing entry (KPMG, 2026). Listing reflects unresolved shortcomings against the EU's tax good-governance criteria rather than its headline rate. Anyone considering Panama for structuring should weigh the defensive measures EU states apply to listed jurisdictions.
What is the difference between the blacklist and the greylist?
The blacklist (Annex I) names jurisdictions that failed to meet EU tax good-governance criteria, triggering mandatory defensive measures in every member state. The greylist (Annex II) names jurisdictions that fell short but committed to reform within agreed deadlines, so they face monitoring rather than penalties (European Commission, 2026).
Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws change frequently and vary by jurisdiction. Consult a qualified professional before acting.
Sources
- ETF 574 — Update of the EU list of non-cooperative jurisdictions — KPMG EU Tax Centre
- EU Council approves updated EU list of non-cooperative jurisdictions — Deloitte Malta
- Common EU list of third country jurisdictions for tax purposes — European Commission
- Tax defensive measures implemented by European states against non-cooperative jurisdictions — KPMG EU Tax Centre
- Seychelles Removed from Annex II of EU list of Non-Cooperative Jurisdictions — Seychelles Ministry of Finance