France: Updates to list of tax haven countries

On 5 February 2023, the French government expanded the list of non-cooperative states in tax matters. The French blacklist was amended by a decree published in the French Official Journal, with the Bahamas and the Turks and Caicos Islands added as of 1 May 2023. This takes into account the modifications to the EU blacklist made by the European Council on 4 October 2022.

The EU list includes jurisdictions that have not engaged in constructive dialogue with the EU on tax governance or have failed in their commitments to implement the reforms necessary to comply with a set of tax good governance criteria, such as tax transparency or fair taxation.

This means that transactions with those jurisdictions will be impacted from a French tax perspective, notably through an increase in withholding tax in France on dividends, interests, capital gains, royalties, or inheritance duties in connection with a trust. This could also mean different rules for the transfer pricing tax audit, DAC6 reporting, tax deductibility exclusion of interests or other costs, and the inclusion of profits from such territories in French taxable income.

Given the heavy tax consequences, transactions or connections with blacklisted countries should be specifically scrutinised in France, as the Ecovis advisers know.

The jurisdictions currently on the French list of non-cooperative states and territories in tax matters, as defined by Article 238-0 A of the French Tax Code, are: American Samoa, Anguilla, the British Virgin Islands, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands, and Vanuatu.

For further information please contact:

Vanessa Raindre, Tax partner, MD Legal, Paris, France
Email: vanessa.raindre@mdlegal.fr