Seven Caribbean countries on France’s new grey list

(CNS): Following the OECD’s listings on co-operative or non co-operative countries when it comes to internationally agreed tax standards, France has now created its own grey list of eighteen nations which it deems as uncooperative  – seven of which are located in the Caribbean. The European nation has said that any French company doing business in these countries will now pay more tax to France’s government coffers and those with tax exempt status will see it annulled.  This could see taxes increase for those firms by as much as 50%.

The French grey list is based on the OECD criteria which had originally seen the Cayman Islands also grey listed until the CI Government had signed the necessary minimum 12 Tax Information Exchange Agreements with other OECD countries. Cayman currently has 14 agreements with plans to sign several more.

St Kitts and Nevis along with Anguilla, Belize, Dominica, Grenada, Montserrat, St Lucia and St Vincent and the Grenadines however, are now on the French list dubbed as uncooperative tax havens. The nations made the `grey list` of jurisdictions that were classified as having `committed to the internationally agreed tax standard, but have not yet substantially implemented.`

As part of the blacklisting, France plans to imposing greater taxes on all domestic companies that have operations in these jurisdictions. Taxes expected to see a jump from 15 to 50 per cent and tax exemptions will be annulled. 
St Kitts and Nevis’ prime minister said the French government was jumping the gun.  “We think that France has acted out of turn and it has acted prematurely against the commitment that was made with the OECD countries that March would have been the deadline for any punitive action to be taken,” Denzil Douglas said.

The Paris-based Organization for Economic Co-operation and Development (OECD) gave grey listed countries until March 2010 to sign the requirement of 12 TIEAs to make the white list, something Douglas felt was achievable.

St. Kitts and Nevis has already signed nine different agreements with OECD countries. Agreements have been initialled with 11 other nations and negotiations are continuing with six more countries.