15/01/20

BAHAMAS: Blacklisted by France along with BVI.

As published on caymancompass.com, Tuesday January 14, 2020.

France has added the Bahamas, the British Virgin Islands, Anguilla and the Seychelles to its list of non-cooperative territories in tax matters.

The updated tax blacklist was released on 7 Jan. by Finance Minister Bruno Le Maire and Minister of Public Action and Accounts Gérald Darmanin and follows the publication of a similar updated list by the Netherlands.

France has blamed the jurisdictions’ deficiencies in the exchange of tax information for the listing, stating that French tax authorities were unable to obtain the requested information.

Panama remained on the list for the same reasons, given that the dialogue with the country over pending information request and better bilateral cooperation had not progressed sufficiently, the ministries said in a joint press release. Similar discussions with the other countries and territories are still ongoing.

Bahamas Deputy Prime Minister Peter Turnquest, however, said his government was “in the blind” about the reasons for the tax blacklisting. “Actually, we are waiting for a response from them to our specific inquiries about the criteria and the issues they have identified as the reasons for this listing. Once we have that information, we will certainly address it,” he said, according to a Bahamas Tribune article.

BVI Premier Andrew Fahie said in a statement that his territory continues to cooperate with France on an ongoing basis to meet treaty obligations. “However, there appears to be a misunderstanding and possible miscommunication on certain matters which we are working with our French partners to resolve,” Premier Fahie said. “For the duration of our relationship, we have diligently followed the processes laid out in the BVI-France Tax Information Exchange Agreement (TIEA) and will continue to do so. Thus, it is unfortunate that we were included on the French list while working through French requests.”

The list is part of France’s Anti-Fraud Law, adopted in October 2018, and the fight against tax evasion. It incorporates the jurisdictions on the EU tax blacklist and now includes 13 jurisdictions.

Brunei, Guatemala, the Marshall Islands, Nauru and Niue were removed from the list after signing the OECD Convention on Mutual Administrative Assistance in Tax Matters.

Companies with a link to listed countries may be subject to a 75% withholding tax on interest and dividends, stricter information filing on transfer pricing, and do not have access to the tax benefits such as the French parent-subsidiary regime.

The list includes Anguilla, the Bahamas, Fiji, Guam, the British Virgin Islands, the US Virgin Islands, Oman, Panama, Samoa, American Samoa, the Seychelles, Trinidad and Tobago and Vanuatu.