BRUSSELS: European Union finance ministers are set to remove the United Arab Emirates next week from the bloc's lists of countries deemed to be acting as tax havens, an EU document said.
They will however continue to blacklist three US territories of American Samoa, Guam, and the U.S. Virgin Islands.
The UAE, the largest financial center still on the list, is due to be removed at a meeting on Oct. 10 because it adopted new rules on offshore structures in September, the EU document said.
The Gulf state charges no corporate taxes, making it a possible target for firms seeking to avoid paying tax in the countries where they actually operate.
The EU does not automatically add tax-free countries to its list, but to reduce the risk of tax dodging it had requested that the UAE introduce rules that would allow only companies with a real economic activity there to be incorporated.
The 28-nation EU set up a blacklist and a grey list of tax havens in December 2017 after revelations of widespread avoidance schemes used by corporations and wealthy individuals to lower their tax bills.
The lists are regularly reviewed to take account of overhauls or to add new jurisdictions.
The inclusion of US territories on the list has long been a source of friction with Washington. The tussle could escalate further after a bilateral trade war erupted this week over illegal EU aircraft subsidies.
Blacklisted states face reputational damage and stricter controls on transactions with the EU.