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French Senate Backs Oman DTA Protocol

by Ulrika Lomas,, Brussels

12 February 2013

The French Senate has recently adopted a bill authorizing the approval of a protocol to the bilateral agreement between France and Oman aimed at avoiding double taxation.

The French National Assembly had provided its support for the bill during a first reading on November 19, 2012.

Signed in Paris on June 1, 1989, the bilateral Franco-Oman DTA was first amended on October 22, 1996.

The latest protocol, which was signed in Paris on April 8, 2012, provides for an exchange of tax information, based on the Organization for Economic Cooperation and Development’s model convention. The provision is designed to strengthen fiscal transparency.

The protocol with Oman is intended to complete France’s tax arsenal in the fight against tax evasion and tax fraud in the Gulf region. France has already signed similar protocols with Qatar in 2008, with Bahrain in 2009, and with Saudi Arabia in 2011.

The agreement reflects the improved relations and increased fiscal cooperation between France and Oman, which appeared on France’s so-called "black list" of states and territories deemed to be uncooperative in tax matters (ETNC) between January 2011 and April 2012.

Following the signing of the protocol, Oman was subsequently removed from the infamous list.

In April last year, France updated its "black list" of countries deemed to be "uncooperative" in tax matters.

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

In 2012, 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 2011.

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 unfavorably, 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.

TAGS: Nauru | Finance | tax | investment | double tax agreement (DTA) | Brunei | Liberia | Montserrat | Saint Lucia | Saudi Arabia | interest | royalties | law | Bahrain | Belize | Cook Islands | Grenada | Marshall Islands | Niue | Philippines | Qatar | Anguilla | Botswana | Costa Rica | Dominica | France | dividends | Oman | Panama

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