Panama and Viet Nam move out of Annex I of the EU tax list

A decision adopted on 9 October 2026

The Council approved the revised Annex I and the status of commitments in Annex II in its conclusions of 9 October 2026, document 13854/26. Panama and Viet Nam no longer appear among the jurisdictions in Annex I. They are included in Annex II among those awaiting an in-depth Global Forum review of exchange of information on request. This is a revision adopted by the Council, rather than a proposal for future reform. [CONCLUSIONS]

The Council’s press release explains the reasons for the move: reform of the harmful foreign-source income exemption regime and a new review for Panama; reforms followed by a new review for Viet Nam. Removal from Annex I therefore does not mean that all monitoring has ended. The Commission confirms this reading and presents the update as a step in tax cooperation. [COUNCIL] [COMMISSION]

Annex II retains commitments to monitor

The adopted Annex I contains eight jurisdictions: American Samoa, Anguilla, Guam, Palau, the Russian Federation, Turks and Caicos Islands, US Virgin Islands and Vanuatu. The distinction between the two annexes matters more than a general statement that a country has left the list. Annex II concerns jurisdictions with reforms or assessments still being followed. It is not a general certification of compliance for every business established in those jurisdictions. [CONCLUSIONS] [POLICY]

Viet Nam illustrates that distinction. Alongside the in-depth review of exchange of information on request, Annex II records its commitment to address the general recommendations on parts B(1) and B(2) of the country-by-country reporting terms of reference, on a timetable intended to allow their inclusion in the autumn 2027 Action 13 peer review report. The revision does not establish that future inclusion. Belize, by contrast, is removed from Annex II following a positive assessment. These different paths mean that the updates should not all be treated as equivalent forms of release from monitoring. [CONCLUSIONS] [COUNCIL]

Adoption and the date relevant to a transaction

The Council’s official policy page states that the list becomes official upon publication in the Official Journal of the European Union. As at 11 October 2026, the publication reference for this revision had not been identified in the C series daily view examined, which displayed 9 October, or in the targeted searches carried out. That observation is confined to the sources examined; it does not establish that publication is absent from the entire Official Journal. [POLICY] [OJ_VIEW]

For a transaction, two items should therefore be kept separate: the adopted text and the official reference used by the applicable rule. Before changing a treatment, check whether that rule uses the EU list applicable on the payment date, a national list or a different mechanism. This article does not establish a general date on which tax consequences cease to apply to Panama or Viet Nam. [CONCLUSIONS] [POLICY]

National consequences require separate verification

The Council explains that Member States have significant discretion over defensive tax measures. Its overview distinguishes, among other measures, non-deductibility of certain costs, controlled foreign company rules, withholding tax measures and restrictions on dividend participation exemptions. These are categories of coordinated measures, rather than a uniform tax whose rate or removal is determined by this revision alone. [POLICY]

A useful review starts with the jurisdictions of the payer and recipient and the nature of the payment. It then identifies the national provision actually used, its version and any reference it makes to a list. EU removal may become relevant to that provision, but its effect must be established. The removal is insufficient to conclude that an expense is now deductible, a withholding tax is no longer due or a refund has been secured. [POLICY]

Earlier periods require a separate analysis. A new assessment of a jurisdiction’s status does not, by itself, demonstrate that the treatment of a past payment was incorrect. Review the dates, conditions and evidence on which that treatment rested. This approach also avoids confusing a list change with other elements of a transaction, such as tax residence or the economic substance of the activities concerned. [CONCLUSIONS] [POLICY]

DAC6 is a separate review point

The link with reporting obligations deserves particular attention. Annex IV introduced by Council Directive (EU) No 2018/822, commonly called DAC6, included hallmark C.1.b.ii concerning certain deductible cross-border payments between associated enterprises where the recipient’s jurisdiction appeared on a list assessed collectively by Member States or within the OECD framework as non-cooperative. That reference was therefore not confined to the EU list alone. [DAC6]

This reminder describes the introductory 2018 text; it does not replace examination of the version and national implementation applicable to a particular arrangement. A review should identify the hallmark initially considered, the relevant date and the arrangement’s other characteristics. The revised Annex I is insufficient to conclude that reporting may be omitted or that an arrangement already reported should be deleted. No conclusion on a particular taxpayer’s reporting obligation is expressed here. [DAC6] [POLICY]

A review file that supports a decision

In practice, we suggest bringing the texts and facts together in a short decision record. For each potentially affected payment, record the payer, recipient, income classification, date and rule currently used. Attach the version of the list referenced by that rule, then explain the proposed change and the conditions still requiring verification. A documented conclusion that no change is justified is as useful as a supported adjustment. [POLICY]

The review can proceed in two stages. First, identify transactions whose treatment genuinely depended on Annex I and prepare the missing evidence. Before making a change, confirm the relevant publication and the legal mechanism specific to the transaction. If those elements remain uncertain, record the uncertainty and revisit the analysis when the necessary official source is available. There is no need to attribute hypothetical tax savings to this preparatory work. [CONCLUSIONS] [POLICY]

Limits of this analysis

This analysis concerns the conclusions adopted on 9 October and the official sources examined as at 11 October 2026. It does not review every Member State’s domestic legislation or a particular bilateral treaty. Targeted searches on this new revision identified no directly relevant judicial decision. That finding does not mean that no case law may be useful when analysing an individual transaction. [CONCLUSIONS] [POLICY]

The next revision of the list is announced for February 2027. Until then, the move to Annex II calls for continued attention to outstanding assessments and commitments. For a business, the practical decision depends on the applicable rule and established facts. The revised list supplies one element of that analysis, without itself validating the tax treatment of the business’s transactions. [COUNCIL] [COMMISSION]