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A decree dated 6 January 2020 has updated the list of non-cooperative states and territories (NCST), within the meaning of article 238-0 A of the French Tax Code (FTC). This list, which had not been updated since 8 April 2016, has been extensively overhauled: with the exception of Panama, all the jurisdictions have been withdrawn from the list, while 12 new states or territories have been added.


Therefore, the new list includes the 13 following states and territories: Anguilla, the Bahamas, the British Virgin Islands, Seychelles, Vanuatu, Fiji, Guam, the US Virgin Islands, Oman, US Samoa, Samoa, Trinidad and Tobago and Panama.

With regard to the jurisdictions withdrawn from the previous list (Nauru, Guatemala, Brunei, Marshall Islands, Botswana and Niue), the NCST provisions ceased to apply as of the date of publication of the decree, i.e., 7 January 2020.

Concerning the 12 newly included jurisdictions, restrictive tax measures will apply as of the first day of the third month following the publication of the decree, i.e., as of 1 April 2020 (as a reminder, these measures apply to Panama since 1 January 2017).

Criteria for NCST listing

The deep renewal of the NCST list is notably due to the fact that the states and territories of the European “black list” are for the first time included into the French list, in compliance with the enlargement provided for by the French Anti-Fraud Act dated 23 October 2018.

Originally, article 238-0 A of the FTC has been introduced by the Amending Finance Law for 2009 in order to strengthen the means of combating tax fraud and tax evasion with respect to states or territories that refuse to comply with international standards for the exchange of tax information (criterion #1). This criterion was initially the only one retained for the elaboration of the NCST list.

As from 2018, the enlargement the European blacklist added two additional criteria. From now on, states or territories facilitating the creation of offshore structures or arrangements designed to attract profits without any real economic activity (criterion #2) and those that do not comply with at least one of the other European criteria listed by the Council of the EU (tax transparency, absence of potentially harmful preferential tax regimes or implementation of the “BEPS” project) (criterion #3), are to be included on the French list.

The decree dated 6 January specifies for each state or territory the listing criterion:

  • Criterion #1 (absence of exchange of tax information): Anguilla, the Bahamas, the UK Virgin Islands, Panama, and Seychelles.
  • Criterion #2 (facilitating the creation of offshore structures or arrangements): Vanuatu only.
  • Criterion #3 (non-compliance with other EU criteria): Fiji, Guam, the US Virgin Islands, Oman, US Samoa, Samoa, Trinidad and Tobago.

Restrictive tax measures applicable to NCSTs

The inclusion on the NCST list entails the application of restrictive, if not punitive, tax measures on transactions and cash flows carried out between such NCST and France, with a different impact depending on whether the inclusion is based on criteria #1 or #2 (application of all restrictive tax measures) or on criterion #3 (application of certain restrictive tax measures only).

Restrictive tax measures primarily affect states and territories whose listing is motivated by criteria #1 or #2. Among the many measures applicable to such NCSTs, the following are particularly noteworthy:

  • French source interests and dividends paid on a bank account located in an NCST are subject to a 75 % withholding tax in France, regardless of the beneficiary’s tax residence (FTC, art. 119 bis, 2, al.5 and art. 187, 2 regarding dividends and FTC, art. 125 A, III regarding interest);
  • royalties and others service fees paid by a French debtor to a beneficiary domiciled or established in an NCST are subject to a 75 % withholding tax in France (FTC, art. 182 B);
  • dividends paid by a subsidiary established in an NCST are excluded from the French parent-subsidiary regime in France (FTC, art. 145 al.6, d);
  • the capital gains on the disposal of securities of companies established in an NCST are excluded from the participation exemption regime (FTC, art. 219, I, a sexies-0 ter).

Some other measures are applicable to all NCSTs regardless of the criterion that led to their inclusion on the French list (criteria #1, #2 or #3):

  • the tax deductibility of expenses paid by a French debtor (interest, royalties, other service fees) may not be admitted for French income tax (i) either because the payment is made on an account located in an NCST (regardless of the beneficiary), (ii) or because the beneficiary is established or domiciled in an NCST (FTC, art. 238 A) ;
  • enhanced transfer pricing requirements (FTC, art. 57 and FBTP, art. L.13 AB)

The impact some of these restrictive measures can be limited by the application of international double tax treaties. Also, it is important to point out that certain of these restrictive measures contain a safe harbour rule which mitigates their application should the taxpayer be able to demonstrate that the relevant flow or transaction relates to a genuine economic operation the main purpose and effect of which is not that of allowing payments to be located in an NCST.

In any situation where a French taxpayer is carrying out operations with a person or entity established or domiciled in an NCST, a person o entity in an NCST holds assets in France, or payments are made outside of France in an NCST, attention will have to be paid to possible restrictive tax measures in France and to the availability of safe harbour rules.

All relevant parties (including French taxpayers, persons or entities established or domiciled in an NCST, as well as intermediaries participating to holding or financial structures or payments involving an NCST) shall review their tax obligations in France taking into account this new list.



Guillaume Le Camus is a partner in Baker McKenzie Paris’ Tax Group and chair of the Firm’s Europe Tax Planning & Transaction Group. Before joining the Firm, Mr. Le Camus practiced international tax law at the correspondent firm of a Big Four accounting firm in Paris and New York. Mr. Le Camus has published several articles on international tax planning and transactions, and spoken at tax seminars on the same topics.


Charles Baudoin joined the Tax department of Baker McKenzie in Paris in 2015. Prior to joining Baker McKenzie, Charles was an associate in the tax department at another global law firm in Paris from 2007 to 2014.


Iris Bouffartigue is a Professional Support Lawyer in Baker McKenzie's France office.