The Council of the EU adopted a resolution on a Code of Conduct for business taxation, the aim of which was counteracting the effects of zero tax and preferential tax regimes worldwide.
In 2017, the Code of Conduct of Conduct Group investigated the tax policies of both EU member states and third countries, assessing:
Following such assessment, each non-EU relevant jurisdiction (which includes Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Isle of Man and Jersey) was required to address the Code of Conduct Group’s recommendations about ‘economic substance’.
The governments in each of these jurisdictions have worked closely with the Code of Conduct Group to ensure that those concerns are adequately addressed. As a result of this mandate the ESA and ESA Regulations were enacted.