European Union finance ministers are set to remove the United Arab Emirates from its list of countries deemed uncooperative in tax matters on 10 Oct.
An EU document seen by Reuters indicates that the UAE adopted new rules on offshore structures in September. Similar to demands made of the Cayman Islands, the EU directed the Gulf state to introduce economic substance legislation allowing only companies with real economic activity to be tax resident there.
The three US territories of American Samoa, Guam and the U.S. Virgin Islands will remain blacklisted.
Blacklisted states face reputational damage and stricter controls on transactions with the EU.
Meanwhile, Switzerland is expected to be removed from the EU’s grey list of countries that have agreed to make changes to their tax system. Switzerland’s tax reform will come into force in 2020 and was deemed sufficient to alleviate EU concerns.
Albania, Costa Rica, Mauritius and Serbia are also set to be removed from the grey list next week.