The European Union (EU) is set to remove Vietnam and Panama from its list of non-cooperative jurisdictions for tax purposes, in a move that could ease compliance concerns for companies and investors operating across the two markets.
EU finance ministers are expected to approve the changes at a meeting in Luxembourg on October 9, as per Bloomberg.
Vietnam is expected to move from the blacklist to the EU’s so-called grey list, while Panama is expected to be removed from the process entirely.
The development comes just months after both countries appeared on the EU’s 10-jurisdiction blacklist. In February, the EU added Vietnam and Turks and Caicos Islands to the list, alongside Panama, Russia, Vanuatu and several US territories.
The Council said Vietnam had been listed after an OECD Global Forum review found that it did not meet the required standards for exchanging tax information on request.
The EU’s list is designed to encourage jurisdictions to meet international standards on tax transparency, fair taxation and measures against base erosion and profit shifting.
It is updated twice a year and is separate from national tax measures that individual EU member states may apply.
Vietnam’s expected move to the grey list would signal that Brussels considers the country to have made sufficient commitments to address the identified shortcomings while recognising that work remains.
Countries on the grey list are jurisdictions that have committed to implementing reforms but have not yet completed all the required steps.
Vietnam has been working with the OECD’s Global Forum to strengthen its framework for exchanging tax information.
In July, the Global Forum conducted a technical assistance mission in the country, focusing on the availability of beneficial ownership information, accounting records and banking information, as well as procedures for handling international information requests.
The OECD said the mission followed recommendations from Vietnam’s second-round peer review, published in November 2025.
During the July mission, Vietnam adopted two reforms aimed at strengthening the availability of beneficial ownership information.
For Panama, the expected delisting follows a broader effort to strengthen its tax framework and address international concerns over transparency.
Panama’s finance ministry said in May that its legislature had approved a new economic-substance law covering certain passive foreign income earned by multinational groups domiciled in the country.
The legislation introduces economic-substance requirements for entities receiving specified foreign-source dividends, interest, royalties, capital gains and real-estate income. Entities that cannot demonstrate sufficient substance in Panama, including qualified personnel, appropriate facilities, strategic decision-making and genuine operating expenditure, can face a 15% tax on relevant net taxable income.
The law also modernises rules on permanent establishments, introduces an anti-abuse clause and provides a mechanism for foreign-tax credits. It is due to take effect in the 2027 fiscal year.
Panama has been on the EU blacklist since 2020.
Its finance minister, Felipe Chapman, said in June that securing removal from the list was a priority, citing the impact of the designation on foreign direct investment and business relations with the EU. Panama has also sought to strengthen measures targeting shell companies and improve tax transparency.
The expected changes illustrate how the EU blacklist operates as a mechanism for encouraging legislative and regulatory reform rather than as a permanent classification.
The Council characterises the process as dynamic, with jurisdictions added or removed based on their efforts to address concerns and fulfil their commitments.
For businesses, a change in status can affect the compliance and reporting environment surrounding cross-border structures and transactions.
EU member states are encouraged to apply defensive measures involving jurisdictions on the blacklist, while EU legislation also uses the list in certain transparency and reporting requirements.
For multinational groups, the shift could also reduce reputational concerns associated with jurisdictions appearing on the EU list, although companies will still need to assess local tax rules and reporting obligations before restructuring cross-border operations.
The February list contained 10 jurisdictions, but the October revision would leave Vietnam on the grey list and remove Panama altogether.
EU finance ministers must formally approve the changes.
The outcome will therefore provide a further test of the EU’s approach to tax governance, while giving both Vietnam and Panama an opportunity to demonstrate that reforms are being implemented and maintained.