Blacklisted jurisdictions are viewed by EU Member States as not cooperating fully in combating tax evasion, avoidance, and harmful tax practices. The black list is updated twice a year, and aims to encourage tax good governance.
Vietnam was added to the EU black list after the OECD Global Forum determined that Vietnam failed to meet internationally agreed standards on tax transparency and cooperation, in particular the necessary standards for the exchange of tax information on request. As a result of the qualification as “non-compliant” by the OECD, Vietnam was already added to the list of states who do not meet the OECD standard on exchange of information as published by the Federal Public Service Finance. The inclusion of Vietnam on this list affects payments made to Vietnam as from 10 November 2025.
Belgian residents engaging in transactions with entities established in Vietnam (or other blacklisted jurisdictions) may face adverse tax consequences in Belgium due to the EU blacklisting and the qualification as not meeting the OECD standards on exchange of information, including the following:
- Mandatory reporting obligation: Payments must be reported if the aggregate annual amount paid to so-called tax havens (including EU-blacklisted countries) exceeds EUR 100,000. Failure to comply with this reporting requirement results in the non-deductibility of the payments in Belgium (subject, however, to applicable double tax treaties and EU law);
- Stricter deductibility conditions: Payments made by a Belgian company to entities established in blacklisted jurisdictions are only tax-deductible if the Belgian taxpayer can demonstrate that the transactions are genuine, arm’s length, and not part of artificial arrangements;
- Extended assessment period: if there is a mandatory reporting obligation, the tax authorities may assess the tax return during an extended period of 4 years;
- Dividend received deduction (“DRD”): Dividends received from a company established in a blacklisted jurisdiction no longer qualify for the Belgian participation exemption (“DRD”) and will therefore, in principle, be subject to corporate income tax in Belgium. This also applies to the exemption of capital gains;
- CFC rules: Subsidiaries of a Belgian company established in blacklisted jurisdictions are presumed to meet the taxation condition under the Belgian Controlled Foreign Company (“CFC”) rules, potentially resulting in the taxation in Belgium of certain undistributed income;
- DAC6: Deductible cross-border payments made to an associated enterprise resident in a blacklisted jurisdiction could trigger DAC6 reporting.
For Belgian resident individuals, the blacklisting of a jurisdiction has significant implications under the Cayman tax (the transparency regime applicable to certain foreign legal constructs). Companies or other entities established in Vietnam (or any other blacklisted countries) are presumed to constitute a “legal construct” for purposes of the Cayman tax. This presumption is a rebuttable presumption as the taxpayer can demonstrate that the structure is not a legal construct.
If the presumption cannot be rebutted, Belgian resident (direct or indirect) shareholders of such Vietnamese entities, must declare the structure in their annual income tax return, and may be subject to look‑through taxation, whereby the income of the foreign entity is taxed directly in their hands, irrespective of whether distributions have been made.
Belgian residents who have (direct or indirect) participations in Vietnamese companies, Belgian companies with Vietnamese subsidiaries or Belgian businesses engaging with Vietnamese entities are advised to reassess their structure, transactions and reporting obligations. If you have any questions or would like to analyze how this may affect your situation, please do not hesitate to contact us.
