Last updated 30/10/2026
The European Union has taken another step in its ongoing effort to promote international tax transparency and cooperation by removing Panama and Vietnam from its list of non-cooperative jurisdictions for tax purposes. Following reforms and progress in meeting international tax governance standards, both jurisdictions have been moved from Annex I (the EU blacklist) to Annex II, where their compliance efforts will continue to be monitored pending further OECD reviews.
While this development may appear technical at first glance, it has broader implications for multinational companies, international investors, corporate groups, and entrepreneurs operating across multiple jurisdictions. It also serves as a reminder that tax transparency, substance requirements, and international compliance obligations continue to evolve rapidly, requiring businesses to regularly review their structures and operations.
Understanding the EU Tax Blacklist
The EU list of non-cooperative jurisdictions was first introduced in 2017 as part of the European Union’s broader strategy to promote tax good governance worldwide. Jurisdictions are assessed on criteria relating to:
• Tax transparency;
• Fair taxation;
• Implementation of international anti-base erosion and profit shifting (BEPS) standards;
• Exchange of tax information and international cooperation.
Countries that fail to meet these standards may be included in Annex I, often referred to as the “EU tax blacklist.” Those that are actively implementing reforms are generally included in Annex II and remain subject to monitoring.
The list has become increasingly important because many EU member states have introduced defensive tax measures, enhanced reporting requirements, and additional scrutiny for transactions involving blacklisted jurisdictions. As a result, being listed can significantly impact investment flows and cross-border business operations.
Why Were Panama and Vietnam Removed?
According to the Council of the European Union, both jurisdictions implemented reforms addressing the concerns previously identified by the EU and have been granted further reviews by the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes.
Panama
Panama had been listed since 2020 due to concerns regarding its foreign-source income exemption regime and aspects of its transparency framework. Following legislative reforms and ongoing cooperation with international organizations, the EU concluded that sufficient progress had been made to move Panama to Annex II pending final review.
Vietnam
Vietnam’s inclusion on the blacklist was primarily linked to concerns regarding the exchange of tax information upon request. Following a series of reforms and commitments to improve its information exchange framework, the EU similarly moved Vietnam to Annex II while awaiting the outcome of a renewed international assessment.
The decision reflects what the European Commission described as the positive impact of constructive engagement with jurisdictions seeking to align themselves with international tax standards.
What Does This Mean?
For many international businesses, the removal of Panama and Vietnam from Annex I may reduce certain compliance risks and administrative burdens associated with operating in these jurisdictions.
However, companies should not interpret the announcement as a signal that tax planning opportunities have suddenly expanded or that compliance requirements have diminished. Instead, the development highlights several important trends.
1. International Tax Transparency Continues to Increase
The direction of global tax policy remains unchanged. Tax authorities worldwide continue to expand cooperation, automatic information exchange, and transparency requirements.
As OECD-led initiatives, public beneficial ownership registers, Country-by-Country Reporting (CbCR), Pillar Two global minimum tax rules, and substance requirements continue to develop, businesses operating internationally are expected to demonstrate genuine economic activity and commercial rationale within each jurisdiction where they operate.
2. Substance Requirements Remain Critical
Many multinational groups historically established entities in certain jurisdictions primarily for tax planning purposes. Increasingly, tax authorities are focusing on whether sufficient substance exists to support those structures.
Key questions often include:
- Where are strategic decisions made?
- Where are directors located?
- Where are employees performing activities?
- Is there sufficient local presence?
- Does the entity perform genuine economic activity?
The removal of a jurisdiction from the blacklist does not eliminate these considerations.
3. Cross-Border Structures Require Regular Review
International structures that may have been appropriate five years ago can quickly become outdated due to changes in legislation, reporting requirements, economic substance rules, and treaty interpretation.
Businesses with entities in multiple jurisdictions should periodically assess whether their structures continue to meet both their commercial objectives and evolving compliance requirements.
Why This Matters Beyond Panama and Vietnam
Although the immediate change affects only two jurisdictions, the broader message is that international tax governance is becoming increasingly dynamic.
Jurisdictions can move onto or off the EU lists over time based on their compliance efforts. Businesses relying on cross-border structures therefore need to monitor changes regularly, particularly where operations involve:
- International holding companies;
- Intellectual property structures;
- Financing entities;
- Shared service centers;
- Trading companies;
- Regional headquarters;
- Investment vehicles.
Changes to international tax classifications can influence not only compliance obligations but also banking relationships, investor perceptions, due diligence exercises, and transaction costs.
Increasing Scrutiny from Banks and Service Providers
Another practical consequence of heightened international tax standards is increased scrutiny from banks, payment providers, notaries, accountants, and corporate service providers.
Client onboarding requirements continue to expand as institutions seek greater transparency regarding:
- Ultimate beneficial ownership (UBO);
- Source of wealth and source of funds;
- Group structures;
- Cross-border transactions;
- Business purpose and expected activities.
Companies operating internationally should expect enhanced due diligence to remain a permanent feature of the business environment.
What This Means for International Businesses?
For businesses with existing operations, customers, suppliers, or investment structures involving Panama or Vietnam, the removal from the EU blacklist may reduce certain administrative challenges and compliance concerns. However, it should not be interpreted as a signal that international tax scrutiny is easing. On the contrary, the decision reflects the growing expectation that jurisdictions align with global standards on transparency, information exchange, and substance requirements.
For many organizations, the real question is no longer whether a jurisdiction appears on a blacklist, but whether their international structure remains fit for purpose. As tax authorities, financial institutions, and regulators continue to increase due diligence expectations, businesses should regularly review their corporate structures, holding arrangements, financing activities, and cross-border operations to ensure they remain commercially justified and compliant with evolving international standards.
This is particularly relevant for businesses using international holding companies, operating companies, licensing structures, or cross-border trading arrangements. Changes in regulatory classifications, tax reporting requirements, and information-sharing obligations can have a direct impact on banking relationships, investor due diligence, group restructurings, and future expansion plans.
Why Choose Bolder Launch?
- Expert Local Knowledge
Located in the Netherlands, we have in-depth knowledge of Dutch laws, tax systems, and compliance requirements. Everything is handled in-house, so you never have to worry about third-party delays or miscommunications. - Focus on Your Core Business
Let us handle the complex tasks while you focus on growing your organization and driving success.
Conclusion
The removal of Panama and Vietnam from the EU blacklist is ultimately a positive development, reflecting progress toward greater international tax transparency and cooperation. However, it also reinforces a broader trend: cross-border business structures are being subjected to increasing scrutiny, regardless of the jurisdiction involved. Governments, tax authorities, banks, and other stakeholders are placing greater emphasis on transparency, economic substance, and demonstrable commercial purpose.
For internationally active businesses, this is a timely reminder to review existing structures and ensure they continue to support both operational and compliance objectives. A structure that was efficient and appropriate several years ago may warrant reassessment in light of today’s regulatory expectations.
At Bolder Group and Bolder Launch, we regularly support clients with international expansions, group reorganizations, entity management, accounting, corporate secretarial services, tax registrations, payroll, and ongoing compliance across multiple jurisdictions. Developments such as the EU blacklist updates often serve as a catalyst for businesses to review their international footprint, governance framework, and operational substance requirements. By taking a proactive approach, organizations can reduce risks, maintain business continuity, and ensure they remain well positioned for future growth in an increasingly transparent global business environment.
Please contact us at launch@bolderlaunch.com / corporate@bolderlaunch.com or +31 76 230 0011 to learn more about how we can help expand your business in the Netherlands. We are more than happy to assist with guidance!
The publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No presentation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Bolder Business Services (Netherlands) B.V., its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in reliance on the information contained in this publication or for any decision based on it.
