This article was first published on Tax@Hand, and is reproduced on this blog with the authorization of its authors.
France’s list of noncooperative states and territories (NCSTs) was updated on 17 February 2024 to add Antigua and Barbuda, Belize, and Russia and to remove the British Virgin Islands. The Ministry of Finance updates the NCST list every year.
As a reminder, since 1 January 2010, defensive tax measures apply to jurisdictions on the list, including, for example, the non-application of the French participation exemption regime, increased withholding taxes on outbound payments, and the strengthened application of domestic anti-abuse measures.
Since 1 December 2018, the list of NCSTs also includes the jurisdictions referred to in the EU list of noncooperative jurisdictions for tax purposes. However, the modification of the list is conditioned upon the publication of a specific decree to that effect by the French tax authorities (FTA).
The measures that apply to the noncooperative jurisdictions listed by the EU depend on why the jurisdictions are considered noncooperative. Jurisdictions with rules/regimes that facilitate offshore structures or arrangements aimed at attracting profits that do not reflect real economic activity are subject to all defensive tax measures, while jurisdictions listed because they do not fulfill another criterion are subject only to some of these measures.
Antigua and Barbuda, Belize, and Russia were added to the French list for 2024 due to their inclusion on the EU list of noncooperative jurisdictions in October 2023 (Antigua and Barbuda and Belize as jurisdictions that do not have a rating of at least “Largely Compliant” from the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, Russia as a jurisdiction that has a harmful preferential tax regime and has not resolved this issue).
As a result, only some of the French defensive tax measures will apply to these jurisdictions.
France’s updated list currently includes the following 16 states and territories:
- Jurisdictions subject to all French defensive tax measures:
- Anguilla
- Bahamas
- Seychelles
- Turks and Caicos Islands
- Vanuatu
- Jurisdictions subject to only some of the French defensive tax measures:
- American Samoa
- Antigua and Barbuda
- Belize
- Fiji
- Guam
- Palau
- Panama
- Russia
- Samoa
- Trinidad and Tobago
- US Virgin Islands
Dissuasive measures apply to states added to the list as from the first day of the third month following the publication of the decree (i.e., 1 May 2024 in this case), and cease to apply to states removed from the list as from the date of publication of the decree (i.e., 17 February 2024).
Note that, on 20 February 2024, the EU announced that the Bahamas, Belize, the Seychelles, and the Turks and Caicos Islands had been removed from the EU list. The Ministry of Finance should update its list accordingly in 2025.
