New update of the French Blacklist: with immediate effect
The French blacklist was updated by decree, published in the French Republic’s Official Diary of February 17, 2024.
- BVIs are out of the French blacklist;
- Panama is no longer concerned by the French 75% punitive capital gain tax.
The updated French blacklist contains 16 States and Territories, which can be classified in 2 sub-groups:
FIRST GROUP
- Anguilla
- Bahamas
- Turks and Caicos
- Seychelles (now also included in the EU blacklist)
- Vanuatu
All the French tax punitive measures targeting blacklisted States and Territories apply to the first group, among which:
- French source dividends or interest paid to bank accounts located in a jurisdiction of the first group are subject to a 75% withholding tax irrespective of the tax residence of the beneficiary of such funds, unless the safeguard clause applies;
- Capital gains deriving from the sale of French securities realized by an entity or a trust registered in a jurisdiction of the first group suffer a 75% tax even if the proceed of such sale is cashed out on a bank account located in a cooperative country, unless the safeguard clause applies;
- Trusts with French connections (a French asset, a French tax resident settlor or beneficiary) which would be governed by the law of a blacklisted jurisdiction should be looked at closely since further detrimental consequences could be at stake.
SECOND GROUP
- Antigua and Barbuda
- Belize
- Fidji
- Guam
- American Virgin Islands
- Palaos
- Panama (until February 17, 2024, Panama was in the First Group)
- Russia
- American Samoa
- Samoa
- Trinidad and Tobago
The second group of States and Territories are on the French blacklist only because they do not meet certain criteria of the EU list. They face a limited number of punitive measures. For instance, entities located in such second group of States and Territories do not fall within the scope of the 75% capital gain tax and French reporting obligations when they sell French securities.
For the 3 newly blacklisted jurisdictions (Antigua and Barbuda, Belize and Russia), the punitive measures will enter into force on May 1st, 2024. Until that date, the sale of French securities by entities located in such jurisdictions remains outside of the scope of the 75% punitive capital gain tax.
