France Publishes Revised 2012 'Black List'

by Ulrika Lomas, Tax-News.com, Brussels

26 April 2012

French Finance Minister François Baroin and Budget Minister Valérie Pécresse have recently updated the country’s ‘black list’ of countries deemed to be ‘uncooperative’ in tax matters (les Etats et territories non coopératifs – ETNC).

The revised 2012 list is confirmed in a government decree dated April 4, published in the country’s official journal dated April 12 (journal officiel du 12 avril 2012).

The list has retroactive effect from January 1, 2012, and contains the following eight jurisdictions: Brunei, Guatamala, Marshall Islands, Montserrat, Nauru, Niue, the Philippines, and Botswana.

This year, the government’s black list was reduced considerably. In accordance with the 2012 decree, eleven jurisdictions were removed from the black list as of January 1, 2012, namely Anguilla, Belize, Costa Rica, Dominica, Grenada, Cook Islands, the Turk and Caicos Islands, Liberia, Oman, Panama and Saint Vincent and the Grenadines. Botswana was added to the list.

St Kitts and Nevis and Saint Lucia were removed from the government’s list in May last year.

France adopted its own ‘black list’ of countries deemed to be uncooperative in tax matters back in February 2010. At the time, the original list was signed by former Finance Minister Christine Lagarde and former Budget Minister Eric Woerth.

Established in accordance with specific criteria, the list contains the names of those states failing to provide both fiscal transparency and administrative cooperation with France. As a result, operators located in or realizing transactions with ETNC states will see more restrictive measures applied than under regular law.

If the subsidiaries of a parent company are based in a country appearing on the French government’s black list, they will, for example, no longer benefit from the parent-subsidiary regime providing that dividends, paid by a subsidiary to its parent company, are granted up to 95% exemption from corporate taxation.

Dividends, interest, and royalties paid to entities located in non-cooperative jurisdictions are also taxed unfavourably at 55%.

In accordance with the provisions laid down under article 238-0 A of the general tax code, France’s black list is revised and updated annually.

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