France Announces New Tax Haven Blacklist. Are You Surprised?

FrenchBlacklist

(French Finance Minister Pierre Moscovici Image courtesy ukreuters.com)

Within days of my own prediction of a new OECD tax haven blacklist, France announced that it will amend its anti-tax evasion legislation to ensure that countries who do not adopt the automatic exchange of information by 2015 will be ‘blacklisted’.

This means that operators located in, or realising transactions with blacklisted tax havens, will suffer tax discrimination under French law because more restrictive measures will be applied to them, than other operators. For example, dividends, interest and royalties paid to entities operating in blacklisted countries will be taxed at 55 percent; more than double the normal rate.

Justifying the government’s decision, French Finance Minister, Pierre Moscovici explained that it was to add further pressure to tax havens or jurisdictions deemed unco-operative in tax matters. He went on to point out that automatic exchange of information was gradually becoming the international standard, citing progress on the issue made at the international, European, and national level; and further advances made at the latest G8 meeting in Northern Ireland.http://lowtax.net/asp/story/front/France_Readies_Tax_Haven_Black_List____61144.html

This may not be the end of the story however, because Panama has challenged Argentina’s tax law creating a blacklist of tax havens and unco-operative countries (now repealed and replaced with a ‘white-list’ of non tax havens and co-operative jurisdictions) by lodging a complaint with the World Trade Organization (WTO). It claims that this law which allows for the punitive taxation of Argentine entities doing business with blacklisted countries, is contrary to international trade rules against discrimination of the ‘like’ businesses and ‘like’ goods and services of other member states.

Whatever the WTO decides on Argentina’s blacklist law will be applicable to  France, and other WTO members, who have similar lists.

For more:

https://franhendy.com/2013/06/20/ofcs-have-you-read-the-g8-fine-print/

https://franhendy.com/2013/06/06/tax-haven-blacklist-repealed-but-wait/

https://franhendy.com/2013/06/07/could-the-wto-have-the-final-say-on-blacklists/

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