French tax haven black list angers countries trying to comply with international rules |
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| News - Tax | |||
| Written by Ray Clancy | |||
| Tuesday, 23 February 2010 10:08 | |||
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It means that any French organisation carrying out financial transactions with any of the 18 countries on the list will face huge tax levies. In a document signed by Christine Lagarde, Finance minister, it is made clear that dividends, service fees, royalties, and interest paid by a French entity to a beneficiary in a blacklisted country will be faced with 50% tax. Gains from real estate and securities transactions made in any of the will be subjected to the same levy. Also France’s 95% tax exemption on dividends issued by subsidiaries to their French based parent company will be removed if the subsidiary resides in any of the blacklisted jurisdictions and the new rules take effect next week. The blacklisted countries are Anguilla, Belize, Brunei, Costa Rica, Dominica, Grenada, Guatemala, the Cook Islands, Marshall Islands, Liberia, Montserrat, Nauru, Niue, Panama, Philippines, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and Grenadines. The new law is to be reviewed on January 1st 2011 to gauge the fiscal compliance progress of the jurisdictions and possibly remove the sanctions. Criteria for reconsideration is similar to that of the Organisation for Economic Cooperation and Development’s black and grey lists which classifies a country by the number of Tax Information Exchange Agreements it holds. At least two Caribbean countries have expressed surprise at their inclusion on a tax haven blacklist drawn up by France. Montserrat said it was dismayed to be on the list as it has been recently holding discussions with France. St Kitts and Nevis Prime Minister Denzil Douglas declared that the French government was acting prematurely by including this twin island federation on a list of jurisdictions that it considers to be uncooperative tax havens. ‘We think that France has acted out of turn and prematurely against the commitment that was made with the OECD that March 2010 would have been the deadline for any punitive action to be taken,’ said Douglas, who is also minister of finance. The OECD’s grey list includes countries that are making moves towards compliance and they move onto a white list when they have substantially implemented the agreed tax standard. Douglas added that St Kitts and Nevis has already signed nine different agreements with OECD countries and that agreements have been initialled with 11 other nations and negotiations are continuing with six more countries. ‘Just last week we concluded our negotiations with the government of France and its representatives. We have reached an agreement with them as to the content of the agreement that will be signed and we feel confident that this is an error,’ he said. ‘All that is left for the French at this moment is to arrange the date and time for signing of the agreement that has been concluded. We are satisfied that we are moving forward in the manner that we have to. The understanding is that all countries will conclude no less than twelve agreements by March 2010,’ he added. Add this page to your favorite Social Bookmarking websites          
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