The EU updates its tax blacklist: Panama is out, Vanuatu and Russia stay

In brief

• On 9 October 2026 the Council of the EU approved a revised list of non-cooperative jurisdictions for tax purposes. It contains eight jurisdictions: American Samoa, Anguilla, Guam, Palau, Russia, the Turks and Caicos Islands, the US Virgin Islands and Vanuatu.
• Panama and Viet Nam were removed from the blacklist and moved to Annex II, where the EU monitors commitments.
• Vanuatu stays on the list for one reason: in the Council's assessment it facilitates offshore structures without real economic substance.
• The consequences concern companies and payments: EU countries apply defensive tax measures to them, and advisers must report some arrangements involving such recipients.
• The decision does not affect Vanuatu citizenship or entry to the Schengen area. The EU visa regime for Vanuatu is governed by a different mechanism.

Eight jurisdictions instead of ten: what the Council decided

The Council of the EU has kept the list since 2017. It is prepared by the Code of Conduct Group on business taxation and approved by finance ministers. Each jurisdiction is screened against three sets of criteria: tax transparency, fair taxation and minimum standards against base erosion. The list is revised twice a year, in February and October.

The Council conclusions of 9 October 2026 split jurisdictions into two groups. Annex I is the blacklist itself, the jurisdictions the EU considers non-cooperative. Annex II covers jurisdictions that have made commitments and are implementing them under monitoring. Annex II now lists ten countries and territories, including Panama, Viet Nam, the British Virgin Islands and Turkey.

In the table below, look at the third column: for eight of the ten jurisdictions nothing has changed. The reasons are paraphrased from the text of Annex I.

Panama was removed after reforming a regime that exempted foreign-source income from tax. It stays in Annex II pending an in-depth review of its exchange of information by the OECD Global Forum. Viet Nam was added to the blacklist only in February 2026 and left it eight months later.

Over a year the list has become three entries shorter. That is movement towards meeting commitments, but Vanuatu is not part of it: it appears in all three versions.

What this means for you. If your company is registered in Panama, EU pressure has eased, but the reviews are not over. If it is in Vanuatu or Russia, nothing has changed and defensive measures continue to apply.

Vanuatu is listed because of companies, not passports

The wording in the Council conclusions is short: Vanuatu facilitates offshore structures and arrangements aimed at attracting profits without real economic substance, and has not resolved this issue yet. This is the economic substance criterion. The EU expects a company that books profit in a jurisdiction to do real work there: to have staff, expenses and management on the ground.

This item says nothing about passports, the citizenship programme or Vanuatu nationals. The EU tax list does not assess citizenship programmes at all. It assesses a jurisdiction's tax rules and how it exchanges information with other countries.

There is also a shift that is easy to miss. In the February 2026 version Vanuatu had a second note: it was waiting for an in-depth Global Forum review on exchange of information on request. In the October version that note is gone. Vanuatu has made progress on transparency; the economic substance of companies remains unresolved.

What this means for you. To leave the list, Vanuatu must show the EU that its companies are not used as empty shells for profit. Until then, a Vanuatu company carries extra tax risk in its dealings with the EU.

Four measures an EU country applies to payments to Vanuatu

The list itself fines no one. The consequences come from EU countries through their own laws. In 2019 the Code of Conduct Group agreed guidance on defensive measures against non-cooperative jurisdictions, and the Council of the EU endorsed it. Under the guidance, from 1 January 2021 every EU country applies at least one of four legislative measures.

1. Non-deductibility of costs. Interest, royalties and service fees that a company in an EU country pays to a recipient in a listed jurisdiction do not reduce its tax base.
2. Controlled foreign company rules. The income of a company in a listed jurisdiction is included in the tax base of its owner in the EU country.
3. Higher withholding tax. The EU country withholds tax at a higher rate on interest, royalties, service fees or remuneration paid to a listed jurisdiction.
4. Limited participation exemption. Dividends and other profits from a subsidiary in a listed jurisdiction are not exempt from tax in the way they usually are in holding structures.

Each country chooses its own measure, so the same Vanuatu company will face a different outcome in Germany, France or Cyprus. In addition, since December 2017 EU countries have applied administrative measures: reinforced monitoring of transactions and higher audit risk for those using structures involving listed jurisdictions.

Two more EU rules are tied to the list directly. The first is the directive on the exchange of information on cross-border arrangements. If the recipient of a payment between associated enterprises is in a listed jurisdiction, the arrangement meets a hallmark that advisers or the taxpayer must report to the tax authorities. The second is public country-by-country reporting for large groups. A group with revenue above EUR 750 million shows data separately for each Annex I jurisdiction that was on the list on 1 March of the reporting year.

The last layer is not about tax. The Council has stated that the European Commission takes the list into account in EU financing and investment operations. For a private Vanuatu company this is mostly background, but it closes the door on any project with European funding.

What this means for you. If your Vanuatu company receives money from European counterparties, each such payment may cost the payer more. That weakens your position in negotiations, even though nothing has formally been prohibited.

For a Vanuatu citizen the 9 October decision changes nothing

The EU tax list does not concern individuals as citizens. A bank or tax authority in the EU looks not at the passport but at tax residence: where a person lives and pays tax. A Vanuatu citizen living in Portugal or Greece is, for their tax authority, a Portuguese or Greek resident. Measures against listed jurisdictions do not apply to that person.

The visa question is settled separately. The EU fully suspended visa-free entry to the Schengen area for Vanuatu nationals back in 2023 through the visa suspension mechanism. Regulation (EU) 2025/11, adopted on 19 December 2024, moved Vanuatu to the list of countries whose nationals need a visa. The grounds were the investor citizenship programmes, not tax rules. We covered this in detail in our article on the Vanuatu passport and Schengen.

For European plans this means the path runs through a residence permit in an EU country. A Vanuatu passport is the starting point: with it you can obtain, for example, a Greek residence permit, and tax questions are then settled by the country of residence.

What this means for you. If you hold a Vanuatu passport but have no company in Vanuatu, the Council decision is news for you, not a task. The passport is valid and the conditions for entering the EU are unchanged.

How a bank reads the list

There is no formal ban on serving clients linked to listed jurisdictions. But an EU bank assesses client risk on many factors, and the EU tax list is one of the public sources that is hard to ignore. Separately, the EU keeps a list of high-risk third countries for money laundering. That is a different document with different obligations for banks, and it does not automatically match the tax list.

For a personal account of a Vanuatu citizen, what matters is what mattered before: documented source of funds and clear tax residence. For a corporate account of a Vanuatu company, the list is an additional compliance question. The bank will want to know where the company actually operates and who manages it. What banks ask Vanuatu passport holders we covered in our article on accounts for Vanuatu citizens.

What this means for you. A corporate account for a Vanuatu company is harder to open at an EU bank than a personal account for a Vanuatu citizen. Prepare documents on real activity in advance.

When there is no need to hurry

The 9 October decision requires no action from most Vanuatu passport holders. There is no need to hurry if you have no company in Vanuatu and your money and taxes are tied to your country of residence. Nor is there if your Vanuatu company does only local business and receives no payments from the EU: defensive measures work on the EU side, through payments made by its residents.

Sharp moves are not needed either. Moving a company because of one piece of news is expensive, and the list changes. Over the past year Vanuatu has made progress on transparency, and economic substance is a matter of law and how it is applied. If the company is used for dealings with the EU, decide after calculating what a specific country's measures cost, not on the strength of a headline.

What this means for you. Look not at the company's flag but at payment flows. If no EU money passes through your Vanuatu company, there is nothing urgent to do.

What a company owner should check before February 2027

On the established schedule, the next review of the list is expected in February 2027. There is time to go through the steps calmly.

A Vanuatu citizen's personal taxes are settled separately from the company. A passport by itself does not change tax residence; see our article on taxes for Vanuatu citizens.

How this piece was prepared

This piece is based on the Council of the EU conclusions on the revised list of non-cooperative jurisdictions for tax purposes of 9 October 2026 (document 13854/26), 17 February 2026 (document 5869/26) and 10 October 2025, the statement of the EU Delegation to Panama of 9 October 2026, the Code of Conduct Group report of 25 November 2019 containing the guidance on defensive measures (document 14114/19), Directive 2018/822 on the exchange of information on cross-border arrangements, Directive 2021/2101 on public country-by-country reporting and Regulation (EU) 2025/11 on the visa regime for Vanuatu. The reasons for listing are paraphrased from the text of Annex I. The defensive measures of a specific EU country depend on its law. This piece is not tax advice on your structure.