Two symmetrical myths surround these lists: one that ignores them entirely, and one that attributes to them effects they do not have. Both cost money. The most expensive: "payments to the blacklist are taxed at 50%." For an investor or family with cross-border flows through Romania, the distinctions here decide real exposure.
A client with a Romanian trading company received, one February morning, an email from his bank: an Asian supplier's account could no longer be credited, transactions were on hold, further explanations were required. The reason: the supplier's state had been added, a few days earlier, to the European Union list of non-cooperative jurisdictions for tax purposes.
Nothing in the client's business had changed — the goods were the same, the contracts the same, the prices the same. Only a list had changed.
The list is revised periodically and built on three criteria: tax transparency (exchange of information on request and automatically), fair taxation (the absence of harmful tax regimes) and implementation of the BEPS measures (the OECD minimum standards).
Jurisdictions that failed to meet the criteria and did not commit to reforms. It is the only annex to which Romanian tax law today refers.
Jurisdictions that do not yet meet all the criteria but have committed to concrete measures within an agreed timetable. It is a monitoring list, not a sanctioning one.
On 17 February 2026 the Council adopted the updated list. Annex I comprises ten jurisdictions: American Samoa, Anguilla, Guam, Palau, Panama, the Russian Federation, the Turks and Caicos Islands, the US Virgin Islands, Vanuatu and Vietnam.
Compared with the previous version, the Turks and Caicos Islands were added — following concerns raised by the OECD Forum on Harmful Tax Practices regarding the enforcement of economic substance requirements — and Vietnam, after the Global Forum's assessment found non-compliance with the standard on exchange of information on request. Fiji, Samoa and Trinidad and Tobago were removed, as they now comply with the agreed international standards.
Annex II comprises nine jurisdictions: Belize, the British Virgin Islands, Brunei Darussalam, Eswatini, Greenland, Jordan, Montenegro, Morocco and Turkey. Antigua and Barbuda and the Seychelles were removed from Annex II after meeting their commitments.
Bear in mind, though, that the lists are not stable. The review takes place, as a rule, twice a year, the next being scheduled for October 2026. The enumeration above is the one in force at the date of this analysis; before any decision, check the list at the primary source — the Council of the European Union's page and the text published in the Official Journal of the European Union.
The Global Forum on Transparency and Exchange of Information for Tax Purposes assesses, through peer reviews, how far each jurisdiction actually implements the exchange of information — on request and automatically. The result is not a "blacklist" in a sanctioning sense, but a compliance rating (compliant, partially compliant, non-compliant). These assessments in turn feed the EU criteria — but the two exercises remain distinct, with different legal effects.
How a jurisdiction enters and leaves the list. The Code of Conduct Group assesses jurisdictions against the criteria above; those that fail them but make concrete commitments within a timetable land on Annex II. If the commitments are honoured, the jurisdiction leaves the list — as with the Seychelles and Antigua and Barbuda in February 2026. If they are not, the jurisdiction moves up to Annex I.
Turkey's case is instructive. Its inclusion on Annex II produced, under the original wording of Romanian law, a real commercial problem — expenses with Turkish partners had become non-deductible, even though the commercial relationship was perfectly normal. The response was a legislative amendment that removed the reference to Annex II. The lesson is not that "nothing happens", but that the effect of a list depends on the wording of the national law that refers to it — and that wording can change in both directions, sometimes within weeks.
Art. 25(4)(f^1) of the Romanian Tax Code provides for the non-deductibility of expenses incurred as a result of transactions with a person situated in a state that, at the date the expense is recorded, is included in Annex I of the EU list. Two essential points, missed by most commentary:
First: the original text, introduced by Law no. 296/2020, targeted both Annex I and Annex II. By Government Emergency Ordinance no. 13/2021, the reference to Annex II was removed. The grey list no longer triggers non-deductibility.
Second: for transactions carried out from 1 January 2021, non-deductibility operates only where the expenses are incurred as a result of transactions with no economic purpose. A genuine purchase of goods, at market price, from a supplier in an Annex I state, with documented economic justification, does not become non-deductible merely because of the supplier's location.
The burden of proof, of course, remains: the economic purpose must be demonstrated, not asserted. Contract, commercial correspondence, transport, receipt, resale — the ordinary documentation of a real transaction.
It is frequently said that "payments to blacklisted jurisdictions are taxed at 50%." This is false.
Art. 224 of the Tax Code provides a 50% rate for certain categories of income obtained from Romania by non-residents, but its application presupposes two cumulative conditions: (1) the income is paid into an account in a state with which Romania has not concluded a legal instrument enabling the exchange of information; and (2) the income is paid as a result of transactions qualified as artificial under art. 11(3) of the Tax Code.
CAUTION: The 50% rate is not tied to the EU list. The legal test is not membership of Annex I, but the absence of an exchange-of-information instrument — a completely different test, which may be met by states appearing on no list and, conversely, may not be met by states on Annex I with which Romania has an exchange-of-information agreement. And even then, the rate applies only if the transaction is qualified as artificial. A genuine payment, with economic purpose, into an account in a state without an exchange-of-information instrument does not trigger 50%. Confusing the two tests produces, in practice, two kinds of error: the unjustified withholding of 50% (with commercial damage and contractual disputes) and, conversely, complete disregard of the risk where both conditions are in fact met.
Hallmark C1 concerns deductible cross-border payments made between two or more associated enterprises where the recipient is in a jurisdiction that imposes no corporate tax or imposes it at a rate equal or close to zero, or in a jurisdiction included on a list of non-cooperative jurisdictions. The technical distinction matters:
Reporting arises only if the main benefit test is also met — that is, if obtaining a tax advantage is one of the main expected benefits.
Reporting arises regardless of the main benefit test. The objective fact is enough.
In other words: a deductible payment to an affiliated entity in an Annex I state is DAC6 reportable even if you pursue no tax advantage. The reporting deadline is 30 days, and failure to file is penalised.
The Council agreed that member states should apply, towards Annex I jurisdictions, at least one defensive measure of a tax nature — from the categories: non-deductibility of expenses, application of the controlled foreign company rules, increased withholding tax, limitation of the participation exemption — plus enhanced administrative measures (documentation, monitoring, audit risk). Romania chose the path of conditional non-deductibility, described above.
The practical consequence for a group with operations in several member states: the same jurisdiction can attract different treatment in different states. A per-state check is mandatory; do not extrapolate the Romanian regime.
Anti-money-laundering legislation: a completely different list. Law no. 129/2019 imposes enhanced customer due diligence for relationships with persons from high-risk third countries, identified through the European Commission's list. Note: this is a list distinct from the Council's tax list, drawn up on anti-money-laundering and counter-terrorist-financing criteria, not on tax-transparency criteria. A state may appear on one and not the other. The consequences are just as concrete: additional checks, documentation of the source of funds, identification of the beneficial owner and verification in the beneficial ownership register, senior-level approvals within the bank, delays.
Banks practise de-risking: they prefer to close a relationship rather than manage the risk. In practice this means accounts refused at opening, payments frozen for clarification, relationships terminated unilaterally on short notice, difficulty finding a replacement. None of these decisions is a tax administrative act and none can be challenged in tax litigation. They are commercial decisions of private entities, and for a business that depends on payment flows they can cost more than any tax.
The effect spreads, moreover, beyond the direct relationship. Your bank may accept you without reservation, but the correspondent bank through which the payment passes may not — and its decision is neither communicated nor capable of being explained to you. Likewise, a large corporate client may ask you, in its own compliance process, to declare whether you have entities or relationships in listed jurisdictions. An affirmative answer does not automatically disqualify you, but it opens an additional file that you will have to sustain with documents.
The lists change — Vietnam, in February 2026, is the perfect example: an ordinary trading partner that becomes overnight a compliance problem. The correct order of steps:
The tax treatment is assessed at the date the expense is recorded, or at the time of payment. Operations prior to listing are not re-characterised retroactively by the mere addition to a list.
If the operations are genuine, the evidence is what preserves deductibility. Build the file now, not at the audit.
Deductible payments to affiliates in that jurisdiction may become DAC6 reportable without the main benefit test.
Inform the financial institution proactively, with the transaction documents. An explanation offered before the question is worth far more than one offered after the payment is frozen.
Not only the tax ones: another supplier, another contractual route, another payment structure. Sometimes the correct solution is purely operational.
Moving an entity in a panic, precisely in the year of listing, is exactly the pattern that attracts questions about the purpose of the arrangement — and may trigger exit tax (art. 40^3 of the Tax Code) or additional reporting obligations.
No. The reference to Annex II was removed from art. 25(4)(f^1) by Government Emergency Ordinance no. 13/2021. Annex II is a monitoring list for commitments made, not a basis for non-deductibility in Romanian law. The ordinary requirements of economic justification and documentation remain, as for any expense.
Not automatically — and most probably not. The 50% rate under art. 224 of the Tax Code presupposes two cumulative conditions: payment into an account in a state with which Romania has no exchange-of-information instrument and qualification of the transaction as artificial under art. 11(3). Membership of the EU list is, in itself, neither of the two. Check separately for the existence of the exchange-of-information instrument and the genuine nature of the transaction.
From the primary source: the list adopted by the Council and published in the Official Journal of the European Union. The check is made at the date of the operation, not at the date of the audit, and the evidence of the check is worth keeping on file. Reviews take place, as a rule, twice a year — the next announced for October 2026.
From an income tax perspective, nothing by itself: the income was and remains declarable in Romania if you are Romanian tax resident. What changes is the attention — of the bank holding your account, of the Romanian bank receiving the transfer and of the tax administration, which receives the data anyway through the automatic exchange of information. If the income from that account has not been declared until now, the listing is not the cause of the problem, but the moment it becomes visible — and from there the discussion can move to the criminal consequences of undeclared foreign accounts.
This article is strictly informational and does not constitute legal or tax advice. Individual situations must be analysed case by case. Legislative position reflected: 18 July 2026.
Time limits run from the moment of communication. An initial discussion clarifies what is alleged, what you need to justify and how the defence is built — before an estimate becomes a tax assessment.