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9 mars 2021
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New Update of the French Blacklist: Bahamas and Oman are out with immediate effect

The French blacklist was updated by in the Official Diary of the French Republic on March 4, 2021.

It is a relief for Bahamas and Oman which are now both out of the French blacklist with immediate effect.

The updated French blacklist contains 13 States and Territories which can be classified in 2 sub-groups:

First group:

  • Anguilla
  • The British Virgin Islands
  • Panama
  • Seychelles
  • 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 one of the jurisdictions 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:

  • American Samoa
  • Dominica (newly included)
  • Fidji
  • Guam
  • Palaos (newly included)
  • Samoa
  • Trinidad and Tobago
  • The United States Virgin Island

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 example, entities located in such second group of States and Territories do not fall within the scope of the 75% capital gain and French reporting obligations when they sell French securities.

For the 2 newly blacklisted jurisdictions (Dominica and Palaos), the punitive measures will enter into force on 1 June 2021.

Arkwood Team