France removes the BVI and Montserrat from the list of non-cooperative states and territories

The French government published the updated list of so-called non-cooperative states and territories (“NCSTs”) in the Journal officiel dated December 22, 2015.

The BVI and Montserrat have been officially withdrawn from the French list of NCSTs. The current list only contains the six remaining jurisdictions: Botswana, Brunei, Guatemala, Marshall Islands, Nauru and Niue.

“Almost the totality of the demand has been treated. The BVI authorities also took the commitment to modify their internal process to facilitate the obtaining of the information” said Michel Sapin, French minister of finances (official press release December 21, 2015).

This is very good news for the industry of investment funds.

As a consequence of this, the 75% withholding tax is no longer applicable either to payments to the BVI and to Montserrat or to capital gains realized by entities domiciled, established or constituted in these territories (as well as capital gains distributed by French private equity funds to LPs established in these jurisdictions).

These changes are effective retroactively as of January 1, 2015. A refund of the withholding tax levied in 2015 could be possible upon request to the tax authorities.

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