PEER REVIEW REPORT COMBINED PHASE 1 AND PHASE 2 REPORT FRANCE OECD 2011

PEER REVIEW REPORT COMBINED PHASE 1 AND PHASE 2 REPORT FRANCE OECD 2011
TABLE OF CONTENTS 3
Table of Contents
About the Global Forum. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Information and methodology used for the Peer Review of France. . . . . . . . . . . . 9
Overview of France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
General information on the legal and tax system . . . . . . . . . . . . . . . . . . . . . . . . .11
Recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Compliance with the Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
A. Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
A.1. Ownership and identity information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
A.2.Accounting records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
A.3. Banking information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
B. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
B.1. Competent authoritys ability to obtain and provide information . . . . . . . . 48
B.2. Notification requirements and rights and safeguards. . . . . . . . . . . . . . . . . . 57
C. Exchanging Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
C.1. Information exchange mechanisms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
C.2. Exchange of information mechanisms with all relevant partners . . . . . . . . 70
C.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
C.4. Rights and safeguards of taxpayers and third parties. . . . . . . . . . . . . . . . . . 75
C.5. Timeliness of responses to requests for information . . . . . . . . . . . . . . . . . . 76
4 TABLE OF CONTENTS
Summary of Determinations and Factors Underlying Recommendations. . . . 83
Annex 1: The Jurisdictions Response to the Peer Review. . . . . . . . . . . . . . . . . 87
Annex 2: French Exchange-of-Information Mechanisms . . . . . . . . . . . . . . . . . 88
Annex 3: List of Laws, Regulations and Other Relevant Material . . . . . . . . . . 95
Annex 4: Persons Interviewed during the On-Site Visit . . . . . . . . . . . . . . . . . . 96
ABOUT THE GLOBAL FORUM 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for Tax
Purposes is the multilateral framework within which work in the area of tax
transparency and exchange of information is carried out by over 100 jurisdic-
tions, which participate in the Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review
of the implementation of the international standards of transparency and
exchange of information for tax purposes. These standards are primarily
reflected in the 2002 OECD Model Agreement on Exchange of Information
on Tax Matters and its commentary, and in Article 26 of the OECD Model
Tax Convention on Income and on Capital and its commentary as updated
in 2004. The standards have also been incorporated into the UN Model Tax
Convention.
The standards provide for international exchange on request of foresee-
ably relevant information for the administration or enforcement of the domes-
tic tax laws of a requesting party. Fishing expeditions are not authorised but
all foreseeably relevant information must be provided, including bank infor-
mation and information held by fiduciaries, regardless of the existence of a
domestic tax interest.
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed. This process is
undertaken in two phases. Phase 1 reviews assess the quality of a jurisdictions
legal and regulatory framework for the exchange of information, while Phase 2
reviews look at the practical implementation of that framework. Some Global
Forum members are undergoing combined Phase 1 and Phase 2 reviews.
The ultimate goal is to help jurisdictions to effectively implement the interna-
tional standards of transparency and exchange of information for tax purposes.
All review reports are published once adopted by the Global Forum.
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to www.oecd.org/tax/transparency.
EXECUTIVE SUMMARY 7
Executive Summary
1. This report summarises the legal and regulatory framework for trans-
parency and exchange of information for tax purposes in France as well as
the practical implementation of that framework. The international standard,
which is set out in the Global Forums Terms of Reference to Monitor and
Review Progress Towards Transparency and Exchange of Information, is
concerned with the availability of relevant information within a jurisdiction,
the competent authoritys ability to gain access to that information, and in
turn, whether that information can be effectively and timely exchanged with
its exchange of information partners.
2. France has a legal framework in place which allows information to be
effectively exchanged for tax purposes. Information relating to owners and
other stakeholders in an entity or arrangement, as well as information relat-
ing to transactions by any entity or arrangement that is subject to registration
requirements and tax obligations in France are consistently available either
from public authorities (tax administration, Trade and Companies Register in
particular) either directly from the entities (register of shareholders), or from
third parties (e.g. banks). The information relating to accounts of commercial
entities, as well as banking information, is also maintained.
3. France has one of the worlds largest networks of international instru-
ments containing exchange of information provisions, with 142 partners.
It is also one of the oldest, which France regularly maintains through the
negotiation of protocols that allow this network to adapt to changes in inter-
national standards. France is also a party to European Union instruments and
to the Joint Council of Europe/OECD Convention on mutual administrative
assistance in tax matters. Lastly, in recent years, France has negotiated tax
information exchange agreements (TIEAs) with various jurisdictions.
4. France communicates but also requests a large volume of information
every year. On average, France replies to 790 requests for information a year
and automatically communicates nearly two million items of information.
France also sends more than 1 000 requests for information each year, mainly
to its partners within the European Union.
8 EXECUTIVE SUMMARY
5. These exchanges primarily take place within the European Union:
Belgium, the United Kingdom and Spain alone account for over half of the
requests received and together with the other EU Member States account
for 80% of the requests dealt with by France. In all, 50 jurisdictions have
requested information from France over the past three years, and their scope
is diversifying.
6. The international affairs office within the tax examination depart-
ment replies directly to almost 40% of the requests for information it receives
by making use of the tax administrations databases which contain large
amounts of data, relating in particular to the ownership of commercial enti-
ties active in France and to assets, as well as all bank accounts opened in
France. The gathering and communication of other data is fully integrated
into local activities, and it is therefore the departments responsible for the
persons concerned which collect information for the purpose of exchange.
They have access powers sufficient to obtain accounting, banking, and own-
ership information of entities. These powers permit the authorities to seek
information from any taxpayer and certain third parties who might be in
possession of information sought. Banking secrecy is lifted vis-a-vis the tax
administration.
7. All of Frances regular partners are on the whole satisfied with the
way in which France replies to their requests, even though several of them
commented on the time that France takes to respond to requests. The intro-
duction in the near future of a system that will issue automatic reminders to
departments in charge of collecting information will allow response times
to be reduced. France is also going to introduce a system which will allow
it to keep requesting jurisdictions systematically updated on the progress of
requests being processed once a period of 90 days has elapsed.
INTRODUCTION 9
Introduction
Information and methodology used for the Peer Review of France
8. The assessment of the legal and regulatory framework of France and
the practical implementation and effectiveness of this framework was based
on the international standards for transparency and exchange of information
as described in the Global Forums Terms of Reference, and was prepared
using the Global Forums Methodology for Peer Reviews and Non-Member
Reviews. The assessment was based on the laws, regulations, and exchange
of information mechanisms in force or effect as at the end of February 2011,
other material and explanations provided supplied by France during the on-
site visit that took place on 25-27 October 2010, and information supplied
by partner jurisdictions. During the on-site visit, the assessment team met
with representatives of the relevant French public agencies, in particular the
General Directorate of Public Finance (see Annex 4).
9. The Terms of Reference break down the standards of transparency
and exchange of information into 10 essential elements and 31 enumer-
ated aspects under three broad categories: (A) availability of information;
(B) access to information; and (C) exchanging information. This combined
review assesses Frances legal and regulatory framework and the implementa-
tion and effectiveness of this framework against these elements and each of
the enumerated aspects. In respect of each essential element a determination
is made regarding Frances legal and regulatory framework that either: (i) the
element is in place, (ii) the element is in place but certain aspects of the legal
implementation of the element need improvement, or (iii) the element is not
in place. These determinations are accompanied by recommendations for
improvement where relevant. In addition, to reflect the Phase 2 component,
recommendations are also made concerning Frances practical application
of each of the essential elements. As outlined in the Note on Assessment
Criteria, following a jurisdictions Phase 2 review, a rating will be applied
to each of the essential elements to reflect the overall position of a jurisdic-
tion. However this rating will only be published at such time as a representa-
tive subset of Phase 2 reviews is completed. This report therefore includes
10 INTRODUCTION
recommendations in respect of Frances legal framework and regulatory and
the actual implementation of the essential elements, as well as a determina-
tion on the legal and regulatory framework, but it does not include a rating of
the elements.
10. The assessment was conducted by an assessment team composed of
two expert assessors and a representative of the Global Forum Secretariat:
Ms. Graciela V. Liquin, Head of Division, International Taxation Directorate,
Tax Administration of the Argentine Republic; Mr. Torsten Fensby, Project
Manager, Denmark; and Ms. Gwenalle Le Coustumer from the Global
Forum Secretariat.
Overview of France
11. France is a Member State of the European Union and of the Economic
and Monetary Union formed by the eurozone countries. It has borders with
eight other jurisdictions: Belgium, Luxembourg, Germany, Switzerland,
Italy, Monaco, Spain and Andorra. It also has territories in the Americas, the
Indian Ocean and the Pacific Ocean.
12. With 65 million inhabitants, France had a GDP of almost
EUR 2 000 billion in 2008 and GDP per capita of EUR 30 600, making it
the worlds fifth largest economy. The French economy is driven by services,
which accounted for 77.5% of total value added in 2008. Financial services
accounted for 5.8% of value added in 2009. France is the worlds second
largest exporter of services and Europes leading agricultural power. It is
Europes second largest producer of manufactured goods after Germany and
the worlds fifth largest, with significant exports in the defence, automobile
and transport sectors.
13. Frances main trading partners are its fellow-members of the European
Union, which account for 60% of French exports. France ranks third in the
world in terms of foreign direct investment, most of it in the OECD zone. Half
of French FDI is in manufacturing industry, the other half in service indus-
tries, mainly in the financial sector.
14. A member of the OECD and the FATF, France has also been part of
the Global Forum since its inception. It has played an active role in work on
transparency and information exchange for tax purposes as a member of the
2002 Working Group on Effective Exchange of Information that drew up the
OECD Model Agreement on Exchange of Information on Tax Matters. It was
a member of the Joint Ad Hoc Group on Accounts (JAHGA) that produced
the JAHGA report and standard.
15. France is also an important EOI partner since it has received and
responded to about 1 800 requests for information relating to direct taxes
INTRODUCTION 11
over the last three years (2007-2009), not counting requests handled under
the existing cross-border agreements that France signed with three partners.
An average of 189 information items are provided every year on this basis.
1

It also has an automatic information exchange programme which transmits
two million items of information to 20 or so jurisdictions every year,
2
and
also makes spontaneous exchanges, albeit to a lesser extent.
3
16. The requests to which France has responded in the last three years
originate from 50 jurisdictions worldwide. Situations vary widely: 10 juris-
dictions have sent only one request to France over the period, while three
partners (Belgium, the United Kingdom and Spain) account for over half the
requests handled by France.
17. France is an important partner for many members of the Global Forum,
in particular within the European Union (which accounts for 80% of requests)
and its involvement in information exchange led to the development of spe-
cific assistance resources, including six tax attachs on foreign postings who
manage, among others, information exchange (urgent or complex matters) with
twelve treaty partners.
4
France has also concluded cross-border agreements that
enable the tax authorities of bordering regions to exchange information directly.
General information on the legal and tax system
Legal system
18. France is an indivisible, secular, democratic and social republic that
asserts the rule of law over all institutions. It includes 96 dpartements in
continental Europe as well as overseas dpartements, collectivits and other
entities (see below).
19. France has a civil law legal system with the following hierarchy of legal
instruments: the Constitution, international treaties and agreements (including
European Union law), statutes of parliament, regulations and other administrative
1. With Germany, Spain and Belgium. A total of 3 300 information items are exchanged
on this basis every year (on request and spontaneously, from and to France).
2. Without counting automatic exchange made in the framework of the European
Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in
the form of interest payments.
3. Requests are counted according to the number of persons concerned: a request
concerning two persons counts as two requests. These figures do not include all
the exchanges conducted under Frances five cross-border agreements. France
also exchanges a significant amount of information relating to VAT each year.
4. United States, Canada and Mexico; Ireland and the United Kingdom; Spain and
Portugal; Italy; Germany; Belgium, the Netherlands and Luxembourg.
12 INTRODUCTION
decisions.
5
Legislative power is exercised by a bicameral parliament comprising
the National Assembly, whose members are elected by direct universal suf-
frage, and the Senate, whose members are elected by indirect universal suffrage.
Under Article 34 of the Constitution, the base, rates and methods of collection
of all types of taxes are determined by statute. National legislation is in principle
unique for France as a whole, except where the Constitution authorises some
derogations for overseas territories, in particular in tax matters.
20. Executive power lies with the President of the Republic (elected by
direct universal suffrage) and the government, which is responsible for apply-
ing statutes, operating public services and maintaining law and order. It is the
government that issues regulations.
21. The judiciary is independent. There are two types of jurisdiction. The
judicial system comprises the criminal and civil courts, the latter including
commercial courts, while the administrative system deals with most disputes
between users and the administration, including the tax administration.
Tax system
22. There are four categories of taxes in the French tax system: income
taxes, wealth taxes, sales taxes and local taxes. France has 48 million indi-
vidual taxpayers
6
and 4.4 million corporate taxpayers (companies either liable
to corporation tax (for most of them), or to income tax on industrial and com-
mercial benefits, for instance self-employed individuals).
23. Unless otherwise provided by treaty, natural persons resident for tax
purposes in France are taxable on their worldwide income. Persons whose
tax residency is outside France are liable to income tax on their French source
income (article 4 of the French Tax Code). Tax is payable by the tax household,
meaning the taxpayer him- or herself, or for a married couple, both spouses
and any children or other persons deemed to be dependent. All their income
and gains are taken together to determine a total net income to which a sliding
tax scale is applied according to the income bracket. The income tax levy was
estimated to have raised nearly EUR 53 billion in 2009.
24. Companies that are resident for tax purposes in France are taxed on
a territorial basis (article 209 of the Tax Code). Companies resident outside
France are liable to corporation tax on their income of French source. The
corporation tax levy was estimated to have raised EUR 52 billion in 2009.
5. Article 55 of the Constitution states that Treaties or agreements duly ratified or
approved shall, upon publication, prevail over Acts of Parliament, subject, with
respect to each agreement or treaty, to its application by the other party.
6. Taxpayers are all persons who pay a tax in France (income tax, corporation tax,
residence tax and other local taxes, etc.).
INTRODUCTION 13
25. The French tax system is based on the Tax Code and the Tax
Procedures Code, which contain articles derived from statutes (the number is
preceded by the letter L) and from regulations (the number is preceded by the
letter R). Regulations explain the statutes and enable them to be implemented.
7
26. France has one of the worlds largest networks of tax treaties and
bilateral and multilateral information exchange agreements, with 142 part-
ners, as well as one of the oldest (the first treaty with Belgium dates back to
1843; see Annex 2). The competent authority for information exchange is the
General Directorate of Public Finance, a Budget Ministry department respon-
sible for the tax administration.
Certain overseas entities are not covered by the French Tax Code or
by information exchange mechanisms.
27. As stated above, tax law does not apply uniformly to all parts of the
French Republic. The French Tax Code and Frances information exchange
network apply to continental France and to the overseas dpartements, namely
Guiana (in Latin America), Guadeloupe and Martinique (in the Caribbean)
and Reunion Island (in the Indian Ocean).
28. Overseas collectivits and other overseas entities enjoy some autonomy
and are outside the scope of Frances double taxation treaties and information
exchange agreements. These are Saint-Pierre-et-Miquelon (off Canada), Saint-
Barthlemy and Saint Martin (in the Antilles), Mayotte (in the Indian Ocean),
8

New Caledonia, French Polynesia and the Wallis and Futuna islands (in the
Pacific Ocean), and the French Southern and Antarctic Lands. These entities
generally have powers that enable them to raise taxes and impose duties. They
are also governed by most other French laws, including criminal law and anti-
money laundering measures. Together, they represent 4% of the French popula-
tion, 1.8% of GDP and 0.01% of the total French banking balance sheet. Their
economies mainly rely on tourism and mining industry (in New Caledonia).
They do not have an international financial services industry.
29. The rest of this report applies to the 96 dpartements in continental
Europe and the four overseas dpartements. Mayotte will become the fifth
overseas dpartement in March 2011, following which all the provisions of
the Tax Code will automatically apply.
7. It is the Constitution (Articles 34 and 37) that set the areas of the statutes and
regulations respectively.
8. Mayotte will become a department in March 2011.
14 INTRODUCTION
Overview of the financial sector and the relevant professions
30. The French financial system plays a significant part in the French
economy. 766 000 people were employed in financial services at the end of
December 2009, representing 3.3% of total employment. Value added from
financial services amounted to over EUR 87 billion in 2009, which represents
5.1% of total value added (with a 7.8% increase from the previous year). The
financial sector is divided into three segments: banks, insurance companies
and other financial institutions. Banks and insurance companies are super-
vised by the Autorit de Contrle Prudentiel (ACP)
9
and other financial
institutions by the Autorit des Marchs Financiers (AMF).
31. The banking sector is governed by specific rules compiled in the
Monetary and Financial Code. Five major groups currently dominate the
French banking sector,
10
with the trend being towards further market concen-
tration. The banking network, especially retail banking, is deeply rooted in
the local fabric.
Recent developments
32. France has engaged in extensive exchanges of information for tax
purposes for many years. Its long-standing network of tax treaties is cur-
rently being updated and protocols or new treaties have been concluded with
11 jurisdictions in the last three years. 27 information exchange agreements
(TIEAs) were concluded with new partners over the same period. 27 of these
new treaties, protocols and TIEAs have entered into force. Other protocols,
treaties and agreements are under negotiation or awaiting signature.
33. France is also active at the European level since it supported the adop-
tion of Council Directive 2010/24/EU of 16 March 2010 concerning mutual
assistance for the recovery of claims relating to taxes, duties and other meas-
ures, and the Directive of 15 February 2011 concerning administrative coopera-
tion in the field of direct taxation. Lastly, at the multilateral level, France was
one of the first signatories, in May 2010, of the Protocol amending the Joint
Council of Europe/OECD Convention on mutual administrative assistance in
tax matters.
9. Created by Ordinance 2010-76 of 21 January 2010, the Autorit de Contrle
Prudentiel is an independent administrative authority operating under the auspices
of the Banque de France.
10. Crdit Agricole, BNP-Paribas, Socit Gnrale, Caisse dpargne-Banque Populaire
and Crdit Mutuel. There were 706 credit institutions at the end of 2009, including
331 banks, mutual or cooperative banks and municipal credit banks.
INTRODUCTION 15
34. No large-scale legal reform relating to transparency and information
exchange has been undertaken recently, though Decree 2010-219 of 2 March
2010 provides for the setting-up of a National Register of Fiducies (a French
contract with some features of a trust) to centralise information in order to
facilitate the supervision necessary to combat tax evasion, money launder-
ing and terrorist financing. Under article 2 of the decree, the information in
the register must include, inter alia, the name, first names, address, date and
place of birth of natural persons who are settlors, trustees or beneficiaries of
the fiducie. All fiducies must be registered in order to be valid.
35. Frances international action to promote transparency and combat tax
fraud and evasion includes Act 2009-1674 amending the 2009 Budget Act,
which contains a number of measures to tighten up the tax rules applicable to
transactions with a non-cooperative country or territory and to increase the
transparency of transactions involving international groups. The anti-abuse
measures in article 209 B of the Tax Code, under which income generated
in tax havens by entities controlled by French undertakings may be taxed in
France, are tightened for income generated via undertakings located in non-
cooperative countries or territories. The rates of withholding tax on interest,
dividends, royalties and some unearned income destined for non-cooperative
countries or territories and on the capital gains of residents of such jurisdic-
tions are also increased. In addition, distributions by entities located in those
jurisdictions may not qualify for parent/subsidiary rules and a documentation
requirement is imposed on international groups.
COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 17
Compliance with the Standards
A. Availability of Information
Overview
36. Effective exchange of information requires the availability of reliable
information. In particular, it requires information on the identity of owners
and other stakeholders as well as information on the transactions carried out
by entities and other organisational structures. Such information may be kept
for tax, regulatory, commercial or other reasons. If such information is not
kept or the information is not maintained for a reasonable period of time, a
jurisdictions competent authority
11
may not be able to obtain and provide it
when requested. This section of the report describes and assesses Frances
legal and regulatory framework on availability of information. It also assesses
the implementation and effectiveness of this framework.
37. All information about the owners and other stakeholders of an entity
or arrangement and information on the transactions carried out by any entity
or arrangement subject to registration and tax obligations in France is avail-
able at any time either from the public authorities (e.g. tax administration,
Trade and Companies Register) or directly from the entities (register of
shareholders) or regulated third parties (banks) and some information is also
publicly available.
11. The term competent authority means the person or government authority des-
ignated by a jurisdiction as being competent to exchange information pursuant
to a double tax convention or tax information exchange agreement.
18 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION
38. The most common entities in France are limited liability companies
(SARL) and companies limited by shares (SAS, and SA for larger compa-
nies). The tax administration knows the identity of all the shareholders of a
SARL and may obtain the identity of all the shareholders of a company lim-
ited by shares either from the company itself or from the financial institution
that manages its shares. Companies, like all other commercial entities, must
keep their accounting documents and underlying documentation for at least
five years under tax law and ten years under company law.
39. French law allows companies to issue bearer shares but from 25 years
ago, they may no longer be issued in paper form, and are immobilised by a
requirement that they are held in securities accounts. They are now mainly
used for stock market transactions and a system for rapidly identifying their
owners is in place. Likewise, in some cases prescribed by law, shares belong-
ing to owners not resident in France may be registered in the name of a nomi-
nee, but the nominee must declare him/herself as such and supply the name
of the beneficial owner on request.
40. Fiducies and foundations exist in French law. Fiducies must be reg-
istered with the tax administration, which holds all the information about
the persons connected with the fiducie (settlor, trustee and beneficiaries)
and their assets. Foundations must pursue a public interest purpose and are
strictly regulated by the authorities. Foreign trusts may own assets in France
and trustees may be resident in France. There is no requirement to declare the
existence of the trust in France but all income derived from assets in France
or their transmission is taxable, which triggers some obligations of declara-
tion with the administration.
41. Banks and other financial institutions have know-your-customer obli-
gations and under French financial law must keep information about transac-
tions carried out by their customers for at least five years.
42. In practice, as concerns the availability of information, Frances
partners are satisfied with French responses to their information requests.
Requests relating to direct taxes received by France
12
from its five largest
partners
13
mainly concern accounting and banking information and, to a lesser
extent, information about the identity of the owners of legal entities (47%,
40% and 13% respectively). 35% of requests concern SAs or SARLs and 13%
concern partnerships, but the majority (52%) concern individuals.
12. In addition to information relating to direct taxes, France exchanges a consider-
able amount of information relating to VAT.
13. The jurisdictions that submitted the most information requests in 2007-2009 were
Belgium, the United Kingdom, Spain, Italy and Portugal.
A.1. Ownership and identity information
Jurisdictions should ensure that ownership and identity information for all relevant
entities and arrangements is available to their competent authorities.
43. There are various types of legal entities in French law. The follow-
ing sections will consider joint-stock companies, bearer shares in joint-stock
companies, partnerships and other legal entities (trusts, foundations and other
entities), ending with a description of existing measures to ensure compliance
with the laws on the ownership of relevant entities.
44. Under article 1832 of the Civil Code, a company or firm is estab-
lished by two or more individuals or legal persons who agree by contract to
combine property or their industry to a common undertaking with a view to
sharing the benefit or profiting from the saving which may result therefrom.
In certain cases provided for by statute, the firm may be established through
an act of will of one person alone. The members also assume liability for the
companys losses. Companies may be commercial or non-commercial (civil).
45. The commercial nature of an entity is determined by its form (SA,
SAS, SCA, SARL, SNC, SCS) or by its purpose (a commercial activity).
Commercial entities (companies or partnerships) and self-employed people
are defined as merchants or traders.
14
Under article L. 123-1 et seq. of the
Commercial Code, traders (and hence commercial companies) are bound by
a number of obligations, including registration in the Trade and Companies
Register and the requirement to keep accounts. Non-commercial entities
(socits civiles) are entities that do not trade.
46. As there are many declaration and registration requirements in France,
there is a one-stop contact point relating to the creation, modification or ces-
sation of business of commercial and non-commercial entities. The contact
point differs according to the type of business,
15
but the information collected
is centralised and disseminated to the various users. These contact points are,
for instance, court registries, including commercial court registries (greffe
14. Trader is a key notion in French commercial law. A trader is any person having
a commercial activity and hence governed by the Commercial Code from a
grocer to a bank.
15. Entry points are called business formality centres. Their scope depends on the
business or legal form of the enterprise making the declaration. There are seven
types of centre: the chamber of commerce and industry of the dpartement con-
cerned for traders, the commercial court registry for socits civiles, chambers
of agriculture, chambers of trades and crafts, the business tax centre, URSSAF
(social security agency) and the national chamber of inland waterway transport.
or clerk), which manage the Trade and Companies Register,
16
tax and social
security authorities and INSEE, a public authority which issues the SIREN
company identification number.
17
In all cases, these public authorities or public
officers ensure the accuracy of the provided information; the aim is to ensure
full legal security to third parties that may or will enter into a relationship with
these entities. Further entries are also made in their databases as legal entities
submit declarations during the course of their lifetime.
47. The Trade and Companies Register is a database containing public
information about all the stages in the life of commercial entities, from reg-
istration and changes in shareholders to termination. Although the register is
managed locally by the approximately 180 commercial court registries, all
the information is centralised and may be consulted online, for a fee, on the
Infogreffe website, to which the tax administration has access.
48. The tax administration has a user-based information system. All the
administrations databases are interconnected and input data to one other in
real time. This allows users, through their tax account, to access all the infor-
mation concerning them. By the same token, the administration also has full
information about the situation of a given person. The administration has at
its disposal several databases inside the administration which collate infor-
mation regarding the ownership of legal entities, in particular:
Transparence Structure cran (structure transparency screen,
TSE) is a tool for identifying shareholders/partners, enabling the
tax administration to recreate shareholder/manager links between
natural or legal persons and entities. For a given entity, TSE provides
identification data (name, first name, date of birth and address of an
individual or name and address of a legal person) for the manager or
managers and the shareholders/partners and the name of any other
undertakings of which the entity is itself a shareholder/partner.
The Base Nationale des Donnes Patrimoniales (national assets data-
base, BNDP) contains information drawn from instruments and declara-
tions relating to assets, such as articles of association, changes to share
capital, windings-up, mergers, business transfers and business pledges.
16. Commercial entities do not acquire legal personality until they are registered in
the companies register (article 1842 of the Civil Code and article R.123-1 et seq.
of the Commercial Code), which they must do within 15 days of incorporation.
The commercial court clerk must arrange for the publication of a notice contain-
ing the companys particulars in BODACC, the official bulletin of civil and com-
mercial notices, within eight days of registering the entity (article R.123-155 et
seq. of the Commercial Code).
17. All commercial and non-commercial entities and all fiducies are assigned a
SIREN number when they are created.
Companies (Socits de capitaux, ToR A.1.1)
49. Socits de capitaux are commercial companies constituted from
the capital provided by the shareholders (at least EUR 37 000). The capital is
divided into shares. There are four types of companies.
A SARL (socit responsabilit limite, limited liability company)
is a commercial company formed by one person (in which case it is
an EURL
18
) or several persons (not more than 100) (article L. 223-1
et seq. of the Commercial Code). It has some of the features of a
joint-stock company, including limitation of the risks borne by the
members, though relations between the members take account of
their person (intuitu personae) and all the shares must be subscribed
by members. In practice, the SARL is by far the most common cor-
porate form, since there are 1.2 million SARL or EURL in France,
representing 82% of all companies. It is a particularly suitable form
for small and medium-sized enterprises.
19
The socit anonyme (public limited company, SA) is constituted by
the shareholders who are liable for losses up to the amount of their
contribution. There may not be fewer than seven shareholders (article
L. 225-1 of the Commercial Code). There are approximately 64 000
socits anonymes, generally large firms, which may be listed.
Shares may be in registered or bearer form (see Section A.1.2 below).
The socit par actions simplifie (simplified joint-stock company,
SAS) is a commercial company governed in principle by reference to
the rules for the SA, though its organisation is more flexible since its
mode of operation, including consultation and majority voting rules,
is defined in the articles of association. It may have a single share-
holder (article L. 227-1 of the Commercial Code). There are 126 000
SAS, a particularly attractive form for family firms. Shares must be
in registered form (article L. 227-2 of the Commercial Code).
The socit en commandite par actions (partnership limited by
shares, SCA) is formed by one or more managing partners, who are
traders and are indefinitely and jointly liable for the partnerships
debts, and limited partners who are shareholders and liable for losses
only up to the amount of their contributions. There may not be fewer
than three limited partners (article L. 226-1 of the Commercial
18. Entreprise unipersonnelle responsabilit limite, or single-member limited liabil-
ity company.
19. SARLs are formally socits de personnes but have some features of socits de
capitaux and are generally taxed as socits de capitaux.
Code).
20
There are only 382 SCA. Shares may be in registered or
bearer form (see Section A.1.2 below).
50. In addition, European companies (socits europennes, SE) are
governed by Council Regulation (EC) No 2157/2001 of 8 October 2001 on
the Statute for a European company, transposed into French law at article
L. 229-1 et seq. of the Commercial Code. A European company can operate
in all EU Member States in a single legal form common to all Member States
and defined in EU law. Under article 10 of the Regulation, the rules that
apply to European companies are those for public limited-liability companies.
Articles L. 225-1 et seq. of the Commercial Code therefore apply to European
companies, without prejudice to article L. 229-1 et seq. (for example, an SE
may have only one shareholder). A European companys head offices must
correspond to the place where it has its central administration, i.e. its real
headquarters.
51. Companies hold information identifying their owners and keep it up
to date. The incorporation of a company also entails registration and publica-
tion requirements.
Information held by the French authorities
52. The identity of all the members of a limited liability company is
included in its articles of association, which are sent to the court registry
when the company is registered in the trade and commercial register (registre
du commerce et des socits). The articles also include the value of the shares
or of the contributions of each member. In addition, article L. 223-6 of the
Commercial Code provides that all the members must be party to the instru-
ment of incorporation, either in person or via a proxy on production of a spe-
cial authorisation. In this situation, the name of the real owner is mentioned
in the articles of association (intuitu personae). Any transfer of shares entails
an amendment to the articles (article R.223-13 of the Commercial Code).
53. As concerns the other types of companies, the information to be
provided is firstly the companys articles of association (SA, SAS or SCA),
which must be drawn up in writing and state the form, purpose, name, regis-
tered office, share capital and term of the company and how it will operate,
20. The difference between an SCA and a socit en commandite simplifie (ordinary
limited partnership, SCS) is that there is no consideration of the person in the
former. The limited partners are merely providers of capital: who they are is not
relevant and their shares may be traded freely. In contrast, consideration of the
person is a fundamental component of the SCS, which is thus categorised as a
socit de personnes (partnership) rather than a socit de capitaux (joint-stock
company) (see following section, ToR A.1.2).
the form of the shares (registered only or in registered or bearer form) and the
name of the founding members (article 1835 of the Civil Code and articles
R. 123-103, R. 224-2 and L. 225-2 of the Commercial Code
21
). The articles of
association need not be amended on a change of shareholders except in the
case of a SCA, whose managing partners, as members indefinitely and jointly
liable for the partnerships debts, must always be identified in the articles of
association by their name, customary name or pseudonym and first names
(article R. 123-54 of the Commercial Code).
54. In tax matters, SARLs, SAs, SASs
22
and SCAs are required, like any
other legal person engaging in business for profit, to declare their existence
and any changes to their fundamental corporate arrangements to the tax
administration. They must declare their company name, legal form, principal
purpose, term, registered office and principal place of business (article 222
of the Tax Code and article 23A of Annex 4 thereof). In the case of SARLs,
the name of all the members must also be declared.
55. The administration also directly possesses a certain amount of
information for companies other than SARLs. In their annual corporation
tax return, companies are required to identify shareholders owning 10% or
more of their capital (page 17 of the annexes to the tax return). In addition,
if the company distributes profits, the persons who pay the capital gains
tax are required to declare the identity and address of the beneficiaries
23

(article 242 ter of the Tax Code). The complete structure of all companies
is therefore not maintained by the tax administration, but by the companies
themselves (see below).
56. Exceptionally, companies may under certain conditions
24
elect to be
taxed in the same way as partnerships. In that case they are subject to the same
declaration requirements and must provide the identity of all their sharehold-
ers with their annual tax return (article 48 of Annex 3 of the Tax Code, see
Partnerships below).
21. For SAs whose shares are not offered to the public, the articles of association must
be signed by the shareholders, either in person or by a proxy with special authori-
sation (article L. 225-15 of the Commercial Code).
22. For the purposes of the French Tax Code and its annexes, the SAS is treated as
an SA (article 1655 quinquies of the Tax Code).
23. They must also declare, by type of income, the taxable amount and the tax credit,
the gross income liable to withholding tax and the amount of the withholding and
the amount of exempted income.
24. SARL, SA, SAS and SCA where the majority of the capital and voting rights
is held by individuals and 34% is held by the companys managers, and certain
property companies (Articles 206, 239 bis AA, 239 bis AB and 1655 ter of the
Tax Code).
57. Legal persons may be shareholders of companies. The obligations of
disclosure of companies do not include an obligation to identify the beneficial
owners where there is a chain of ownership. In practice, however, the data-
bases of the tax administration allow the tax administration to trace a chain
of owners holding at least 10% of the shares, provided that the company, the
ownership of which is sought, is resident in France. The database contains
hypertext links: clicking on them takes the person consulting the database
from the file on the company to the file on the company that owns the shares.
On the other hand, all legal persons members of a SARL are identified in the
articles of association, which are amended each time shares of the SARL are
transferred, without any threshold. Finally, for all types of companies, when
the information is not held in the tax databases the administration can request
the information to the company concerned itself or to a third party (e.g. finan-
cial intermediary, see below).
58. Foreign companies from outside the European Economic Area that
have a permanent establishment in France are subject to a registration require-
ment and are liable to a penalty for non-compliance. They must previously
have made a declaration to the local representative of the state (the Prfet of
the dpartement concerned) and have provided the companys articles of asso-
ciation.
25
They must also inform the tax administration of their business activi-
ties liable to tax and provide the address of their main place of business and
the identity of their representative in France (article 23D of Annex 4 of the Tax
Code). Finally, they must provide the tax administration with an annual tax
return where, as French companies, they are required to identify shareholders
owning 10% or more of their capital (page 17 of the annexes to the tax return).
59. Since 1954, commercial court registries have been required to
keep the information in trade and companies registers indefinitely (article
A. 123-65 et seq. of the Commercial Code, especially article A. 123-72).
Likewise, the tax administration keeps information for an unlimited time.
Information held by companies and other persons
60. The identity of the members of SARLs is included in the articles of
association, as mentioned earlier, and share transfers to third parties is pos-
sible only with the prior notification of all the members and the approval of the
majority of them (articles L.223-13 to L223-17 of the Commercial Code). All
the members therefore know the identity of the other members. The articles of
association are kept either at the companys registered office, with each member
receiving a copy, or by a notary (article R. 223-1 of the Commercial Code).
25. The maximum penalty is six months imprisonment and a fine of EUR 3 750, plus
possible closure of the establishment (see articles L. 122-1, L. 122-2, L. 123-1 and
D. 122-1 to 122-4 of the Commercial Code).
Registered shares accounts and the share register of SA, SAS and SCA
61. As mentioned above, apart from SARLs, only the names of the
founder members are mentioned in the articles of association of joint-stock
companies. They may issue shares in either registered or bearer form (see
A.1.2). Whatever their form, shares must be entered in an account in the name
of their holder under the conditions set forth at articles L. 211-3 and L. 211-4
of the Monetary and Financial Code. Shares are immobilised through their
computerised listing in a share account. For registered shares, the account
is kept by the company issuing the shares or by a delegated manager (titres
nominatifs purs), or by a financial intermediary regulated by the Autorit des
Marchs Financier and hence subject to anti-money laundering laws (titres
nominatifs administrs).
62. The share account is opened in the name of one or more of the share-
holders of the relevant entity. Exceptionally, a share account may be opened
in the name of a fund or collective investment arrangement
26
or a nominee
(see below). In France, the company issuing the shares may obtain this infor-
mation on the basis of articles L. 228-3 of the Commercial Code and L. 211-5
of the Monetary and Financial Code.
63. Whether registered shares are managed by the company itself or by a
financial intermediary, the issuing company is required to keep a register of
registered shares, stating the precise identity of the shareholders. For natural
persons, this would be the name, first name and address of the holders (and
the former holders if shares are transferred; articles R. 228-7 et seq. of the
Commercial Code).
27
Nominees (mandataires)
64. The concept of nominee that exists in some jurisdictions, in particu-
lar under Anglo-Saxon law, does not exist in French law. Registered shares
issued by joint-stock companies registered in France are in principle held
by their beneficial owner, whose identity is known to the issuer, with one
26. Investment funds, property investment funds and securitisation funds. The name
of the fund may validly replace that of all the co-owners.
27. Shareholders are not provided with a list of all the shareholders of a company but
are entitled to obtain it (article L. 225-116 of the Commercial Code). Shareholders
of companies that have issued shares admitted for trading on a regulated market
are required to report significant interests to the company concerned and to
the AMF whenever, individually or in concert, they exceed or fall below a set
of thresholds relating to capital or voting rights. The thresholds are 5%, 10%,
15%, 20%, 25%, 33.3%, 50%, 66.6%, 80% and 95% (article L. 233-7 of the
Commercial Code).
exception. Where a companys shares have been admitted for trading on a
regulated market and the holder does not have his residence (main establish-
ment
28
) in France, an intermediary may be registered on the holders behalf
(see below bearer shares).
65. On opening his share account, the intermediary is always required to
declare his status as a mandataire (nominee) holding the shares for another
person. The intermediary is required to disclose the identity of the holders of
the shares and the number of shares held by each one on a request from the
issuing entity, which may be made at any time.
29
Anti-money laundering legislation
66. French arrangements to combat money laundering and terrorist
financing derive from EU directives,
30
transposed in articles L. 561-5 to
L. 561-14-2 and R. 561-1 to R. 561-54 of the Monetary and Financial Code.
The scope of persons subject to know-your-customer and data conservation
requirements for their usual customers, and in some cases occasional custom-
ers, covers all persons engaged in a financial activity, plus a number of non-
financial professions such as the legal professions (except in the case of court
proceedings or legal advice), accountants and auditors and fiduciary attorneys
(article L. 561-2 of the Monetary and Financial Code). The definition covers
for instance all professions authorised to act as trustees of a French fiducie.
67. In addition to the identity of their customers, reporting persons must
identify and, where relevant and taking account of the risks of money laun-
dering, verify the identity of the beneficial owner of the business relation-
ship, defined as the natural person who directly or indirectly controls the
customer or for whom a transaction or activity is conducted.
31
The threshold
for control (direct or indirect) is set at 25% of a companys capital or voting
28. Article 102 of the Civil Code.
29. The intermediary must respond within 10 working days (articles L. 228-3 and
R. 228-5 of the Commercial Code). If no response is forthcoming, the shares are
stripped of voting rights. Whenever the issuing company considers that certain
holders whose identity has been provided to it are acting on behalf of third-party
owners of the securities, it is entitled to ask the said holders to disclose the iden-
tity of the owners of those securities and the number of securities held by each of
them (article L. 228-3-1).
30. Directive 2005/60/EC of the European Parliament and of the Council (the Third
Money Laundering Directive) and its implementing directive 2006/70/EC.
France is also a member of the Financial Action Task Force (FATF).
31. Articles L. 561-5, L. 561-2-2, R. 561-1 and R.561-7 of the Monetary and Financial Code.
Appropriate means must be used to make the verification, taking account of the risks of
money laundering and terrorist financing.
rights. Control also includes the power of control by any other means over the
companys managerial, administrative or executive bodies or over the general
meeting of its members. The documents collected for this purpose must be
kept for five years after the closure of their accounts or the cessation of their
business relationships, without prejudice to more stringent measures (article
L. 561-12 of the Monetary and Financial Code).
68. Overall, the very comprehensive obligations in company and tax law
meet the standard, and the know-your-customer obligations imposed by anti-
money laundering legislation have no impact on information exchange for tax
purposes. Their impact remains theoretical, since the authorities have never
had occasion to use this source of information. However, it is worth noting that
banking services are used extensively in France and that since all traders must
have a bank account (article L. 123-24 of the Commercial Code), banks, by ver-
ifying their customers identity, possess a considerable amount of information.
69. The only noticeable feature of French anti-money laundering legislation
is the identification requirement relating to foreign trusts (see Section A.1.4).
Bearer shares (ToR A.1.2)
70. In France, bearer shares are immobilised (there is no more paper
shares) and must be identifiable so that companies can know who their share-
holders are (article L. 228-2(1) of the Commercial Code). Bearer shares, like
registered shares, must be entered in an account; shares may only be trans-
ferred from account to account. France has appropriate mechanisms in place
to allow the owners of bearer shares to be identified.
71. As mentioned above, public limited companies (SA) and partnerships
limited by shares (SCA) may issue bearer shares rather than registered shares,
which must be specified in the articles of association (article L. 228-1 of the
Commercial Code and article L. 412-2 of the Monetary and Financial Code).
Companies may only issue bearer shares in two cases: either the shares are
negotiated in a regulated market; or the shares can be included in the transac-
tions of a central depository, when the share account is held by an intermedi-
ary who has an account that is subject to anti-money laundering legislation,
particularly in the case of shares negotiated in a multilateral negotiating
system (article L.211-6 and following of the Monetary-Financial Code), in
which case the conditions enabling the company to identify the sharehold-
ers set forth in the Commercial Code must be fulfilled (articles L. 212-3 and
L. 212-4 of the Monetary and Financial Code). In addition, the intermediary
is a client of the financial institution and hence is covered by the require-
ments under the money laundering legislation, including the identification of
the customer and beneficial owner.
Partnerships (ToR A.1.3)
72. A partnership (socit de personnes) is a corporate form to which
each member agrees to participate taking into consideration each other
member in their personal capacity (intuitu personae). As a result, each mem-
bers share can be transferred only with the other members consent. The
articles of association must be amended when a transfer occurs. There are
two types of commercial partnership in French law (article L. 210-1 of the
Commercial Code), as well as socits civiles.
A socit en nom collectif (general partnership, SNC) is a commercial
entity with at least two members (who are traders) who are jointly and
severally liable for the partnerships debts (articles L. 221-1 et seq. of the
Commercial Code).
A socit en commandite simple (limited partnership, SCS) is a
commercial entity that only partly fulfls the criteria for unlimited liability
entities since it comprises two classes of members: managing partners,
who are jointly and severally liable for the partnerships debts, and limited
partners, who incur no liability for the partnerships debts and whose
risk is limited to the amount of their contribution (they are essentially
fnancial backers). Limited partners may not carry out any external act of
management, even by virtue of a power of attorney. The rules relating to
SNC apply to SCS (article L. 222-1 et seq. of the Commercial Code).
All entities not otherwise defned are socits civiles (article 1845 of the
Civil Code), except for joint ventures (socit en participation).
32
There
are 72 000 socits civiles in France, representing a little less than 5% of
all French frms. They are considered in Section A.1.5.
73. There are few SNCs (5 000) and even fewer SCSs (700), i.e. less than
1% of all French commercial entities. The general partnership is a form suited
to active cooperation between a small number of traders, especially family
companies. However, the French authorities have stated that a SNC may be
included in the structure of a large group, to form a holding company, in
order to safeguard against the acquisition of an interest by a third party, since
shares may be transferred only with the members unanimous consent.
74. About 13% of information requests from Frances five main treaty
partners concern partnerships.
32. Unregistered and fiscally transparent entities without legal personality.
Information held by the French authorities
75. There are some important requirements of identification of partners
since they are jointly and severally liable for the partnerships debts. The full
knowledge of the identity of all partners is therefore essential to third parties,
including the public authorities. The identity of the members of these entities
must therefore be stated in the articles of association, which are filed with the
registry when the entity is registered in the trade and companies register.
Publication and registration formalities
76. The identity of all the members of a SNC must be stated in the
articles of association, which must be filed when the entity is created (arti-
cle 1835 of the Civil Code and article R.123-103 of the Commercial Code).
Transfers of shares must be established in writing and published in the
register (articles L. 221-14, R. 221-9 and R. 222-1 of the Commercial Code),
otherwise they are not binding on third parties.
77. Likewise, the identity of all the members of a SCS must be stated in
the articles of association, together with the amount or value of the contribu-
tion of each one, whether a managing or a limited partner.
33
As with a SNC,
the articles of association of a SCS must be filed on creation of the entity and
amendments (transfers of shares) must be notified to the court registry for
inclusion in the trade and companies register (articles L. 222-4 and R. 123-
103 of the Commercial Code).
78. A legal entity may be a member of a partnership. Since members are
jointly and severally liable for the partnership, the registration request and
the articles of association must indicate the name of the partnership, its legal
status, the address of the main office and the identification number and name
of the city of the court registry in which they are registered (article R.123-54
of the Commercial Code).
Tax obligations
79. From a tax standpoint, SNCs and SCSs are semi-transparent: cor-
porate profits are taxed not in the name of the entity but in the name of
the members, unless the entity has elected to be taxed as a company, an
33. In addition to the articles of association, which contain the names of all the mem-
bers, the identity of all the members of a SNC and of the managing partners of a
SCS (having several and joint liability for the partnerships debts) must be provided
separately when the partnership is registered (article R. 123-54 of the Commercial
Code). The partnership must declare their name, customary name or pseudonym,
first names, domicile, date and place of birth and nationality.
irrevocable choice. However, the partnership is itself regarded as a taxpayer,
even though the members are taxed on the partnerships income, proportion-
ally with their shares in capital, whether they are resident or not.
34
The part-
nership itself has an obligation to declare its income every year.
80. Partnerships, like companies, must declare their existence to the tax
administration within one month of their creation. On that occasion they must
give the name, first names and address of each member,
35
and any change of
member must be declared to the administration within one month.
36
They
must also provide the same information on the identity of their members with
their annual tax return and declare the share of profits distributed to each
member (unless they have elected to be taxed as companies,
37
cf. article 48 of
Annex 3 and article 242 of the Tax Code).
81. The tax administration therefore knows the identity of the members
of SNCs and SCSs.
Information held by partnerships and other persons
82. The identity of the members of partnerships is included in the articles
of association, as mentioned earlier, and shares may be transferred only with
the consent of all the members, established in writing. All the members there-
fore know the identity of the other members. The articles of association are
kept either at the partnerships registered office, with each member receiving a
copy, or by a notary (articles R. 221-1 and R. 222-1 of the Commercial Code).
83. The articles of association and their annexes and any amendments
must be kept by the managers for five years after the partnership has been
deleted from the trade and companies register, in accordance with the civil
law statute of limitation (article 2224 of the Civil Code).
34. According to the case law arising from Conseil dtat judgments in Kingroup
Inc. of 4 April 1997 and Hubertus AG of 9 February 2000, a French partnership
has tax personality and is liable to taxation, implying that its members are taxed
in France, whether or not they are resident there for tax purposes, in the amount
of their share of the profits from its operations.
35. For legal persons members, the declaration form asks for their name, the address
of their registered office, the place of registration and the registration number.
36. Articles 222 and 635 and of the French Tax Code and Articles 23A to 23G of
Annex 4 of the French Tax Code. Any transfer of shares is liable to tax corre-
sponding in principle to 3% of its value.
37. The managers of SNC and SCS that have elected to be taxed as companies must
provide the name, first names and domicile of each member but not their share
of profits.
84. Certain persons outside the partnership (banks or notaries, for exam-
ple) may also keep information on the identity of the members of partnerships
under anti-money laundering laws (see above).
Trusts (ToR A.1.4)
85. Fiducies, structures similar but not identical to trusts,
38
were intro-
duced into French law by Act 2007-211 of 19 February 2007 establishing the
fiducie (the Fiducie Act). Now, they are mostly governed by the Civil Code.
Certain articles of the Tax Code also make explicit reference to fiducies and
foreign trusts.
39
86. To date, France has not received any EOI requests relating to a French
fiducie or a foreign trust.
French fiducies
87. Under article 2011 of the Civil Code, fiducie is an arrangement
whereby one or more settlors transfer assets, rights or sureties, present or
future, to one or more trustees who, keeping them separate from their own
assets, act for a specific purpose for the benefit of one or more beneficiaries.
The fiducie must be express and may not be used for the purposes of transfer-
ring assets free of charge. The Fiducie Act established:
the management fiducie, a contract whereby the settlor transfers
assets or rights to a trustee who is responsible for managing them in
the interest of either the settlor or a third party. This type of fiducie is
governed by articles 2011 et seq. of the Civil Code;
the surety fiducie, a contract whereby a person transfers title to assets
or rights to a trustee to secure an obligation. Specific provisions for
this kind of fiducie are contained in the Ordinance of 30 January
2009, whether the object is personal property or a right (article
2372-1 et seq. of the Civil Code) or real property (article 2488-1 et
seq. of the Civil Code).
88. To be valid, the fiducie contract must stipulate: (i) the assets, rights
or sureties transferred; if they are future assets, they must be determinable;
(ii) the duration of transfer, which may not be more than 99 years; (iii) the
identity of the settlor(s); (iv) the identity of the trustee(s); (v) the identity of
the beneficiary or beneficiaries or, failing that, the rules by which they are
38. Unlike a trust, a French fiducie is a contract.
39. Articles 238 quater A to 238 quater Q for fiducies, Articles 120 and 238bis-01 for
trusts.
designated; (vi) the purpose designated to the trustee(s) and the scope of their
powers of administration and disposal (article 2018 of the Civil Code).
89. The French tax administration possesses information about the iden-
tity of the settlors, trustees and beneficiaries of French fiducies. The fiducie
contract and any amendments to it must be registered within one month at the
tax office of the place where the trustee has his/her registered office (or at the
tax office for non-residents if the trustee is not domiciled in France; article
635 of the Tax Code and article 2019 of the Civil Code
40
) and the tax admin-
istration centralises this information in a National Register of Fiducies
41
to
facilitate measures to combat tax evasion, money laundering and terrorist
financing. The information is kept for ten years after termination of the
fiducie contract.
90. The National Register of Fiducies also contains the name, first
names, address, date and place of birth of natural persons and the company
name and SIREN number and the address of the registered office or estab-
lishment of legal entities.
91. The settlor (natural or legal person ) and the trustee must be resident
in a Member State of the European Union or in a state or territory that has
concluded a tax treaty with France containing an EOI provision with a view
to combating tax fraud or evasion (article 13 of the Fiducie Act).
92. Under article 2015 of the Civil Code, only credit institutions, investment
firms, insurance companies, certain public institutions and agencies (Trsor
Public, Banque de France, La Poste, Caisse des Dpts et Consignations, etc.)
and attorneys may be trustees. The obligations and penalties arising from
measures to combat money laundering and terrorist financing apply to trustees
(article L. 561-1 et seq. of the Monetary and Financial Code, see Section A.1.1).
93. All persons involved in a fiducie must keep documents relating to the
identity of the settlors, trustees and beneficiaries for ten years after termina-
tion of the contract. As at 31 December 2010, seven fiducies were registered.
Foreign trusts having a link with France
94. The concept of trust does not exist in the French legal system. France
has been a signatory of the Hague Convention of 1 July 1985 on the law
applicable to trusts and on their recognition since 1991 but has not ratified it,
40. Where fiducie contracts relate to real property or real property rights, they must
also be registered with the Mortgage Registry (Articles 647 and 657 of the French
Tax Code).
41. Article 2020 of the Civil Code and Decree 2010-219 of 2 March 2010.
and the French Government has not yet decided to ratify it.
42
There is, how-
ever, no obstacle in French domestic law that prevents a French resident from
acting as a trustee or for a foreign trust to own assets in France.
95. As regards the availability of information regarding settlors, trustees
and beneficiaries of trusts, the French law does not require the registration
of foreign trusts in the Register of Fiducies or to disclose immediately this
information. However, if estate property is concerned, the previous and new
owners must be disclosed in front of a notary public.
Tax obligations
96. The French tax administration maintains some information if the
professional trustee is resident in France, the trust is administered in France
or some assets are located in France. The Tax Code provides that the ben-
efits of trusts are considered as income, whatever assets compose the trust
(article 120) must therefore be declared. A professional trustee is subject to
the tax obligations related to his/her main profession, which allows the tax
administration to collect all information related to the trust, as client of the
professional.
97. In addition, some other obligations apply to persons linked to a trust.
As regards the settlor and beneficiaries, any contribution of property or
holding of property into a trust must be declared to the tax administration.
There also exist some anti-abuse provisions that specifically relate to trusts
(articles 123 bis and 209B of the Tax Code).
98. Again, the tax administration can use all the procedures at its dis-
posal to seek and request any information not already in its possession. The
French authorities may ask the taxpayers or the trustee for all information
necessary to determine the amount of taxable income or assets.
99. From a general perspective, if information is considered necessary
for French tax assessment purposes, the taxpayer has an obligation to disclose
such information to the tax authorities. This may include information about
settlors, trustees and beneficiaries. Furthermore, trustees resident in France
are subject to record-keeping requirements for the determination of their own
income. Thus, all records that are necessary for determining whether the trust
income is taxable in the hands of the trustee must be kept. This includes the
names of the settlors and named beneficiaries of the trust and the nature of
the assets in the trust that have generated the income.
42. See ministerial answer to written question no. 06210 from Mr. Philippe Marini
published in the Senate Official Journal of 13 November 2008. Ministerial answers
have legal value and are binding on the administration.
100. Therefore, because general tax requirements in France require that all
taxpayers be able to provide information to the tax authorities whenever tax-
able income must be determined, a trustee resident in France must be able to
provide the tax authorities with information on the settlors and beneficiaries
of trusts that he/she administers.
Money laundering
101. Lawyers and accountants acting as trustee, as well as trust service
providers such as financial institutions, are subject to anti-money laundering
requirements. They must identify and, where relevant and taking into account
the money laundering risks, verify the identity of their clients and the benefi-
cial owner of the business relationship, defined as the natural person who
directly or indirectly controls the customer or for whom a transaction or activ-
ity is conducted.
43
For the purposes of a foreign trust, the beneficial owner
of a transaction is the natural person(s) who is the settlor (rights holder) or
beneficiary of at least 25% of the entitys assets as well as the persons belong-
ing to a class of beneficiaries when not yet designated (article R. 561-3 of the
Monetary and Financial Code). Administrators and trustees are included in
the definition of managers, who must also be identified. Tracfin (the French
financial intelligence unit) may report the information it receives to the tax
administration when it relates to facts that could amount to tax fraud and
evasion (article L.561-29 of the Monetary and Financial Code). The situation
where a trustee in France is not acting by way of business, would not be a pro-
fessional subject to anti-money laundering rules, and would not have a bank
account in France is hypothetical. Such a case, in any event, would not have
any consequence on the tax obligations discussed above.
Practical consequences and conclusion
102. In practice, the French authorities indicate that the trustees of foreign
trusts are very rarely resident in France and foreign trusts are very rarely
administered in France. France has not received any request for informa-
tion about a foreign trust (or a French fiducie) in the last three years, which
appears to confirm that, given the volume of information exchanged by
France, the presence of trusts is insignificant (the only request indirectly
linked to a foreign trust related to a trader who had a commercial relation-
ship with a foreign trust). Several factors would explain this situation. The
fact that France does not recognise the concept of trusts creates a legal risk
for the persons involved in a trust. Thus the assets transferred to a trust may
be considered to be owned by the trustee, and therefore part of his/her assets,
for example in case of death, concerning potential actions of creditors, or for
43. Articles L. 561-5, L. 561-2-2, R. 561-1 and R. 561-7 of the Monetary and Financial Code.
wealth tax purposes. Finally, the tax consequence on benefits drawn from the
activities of the trustees depends on a case by case analysis.
44
103. In conclusion, while trustees resident in France are not subject to spe-
cific obligations to keep identity information regarding settlors and benefi-
ciaries of express trusts, the anti-money laundering obligations, together with
the obligation to submit information to the tax authorities, permit the avail-
ability of such information. In addition, comments from Frances peers do
not indicate that in any instance the French authorities have not been in able
to provide information on trusts. It can therefore be concluded that France
has taken all reasonable measures to ensure that information is available to
its competent authorities that identifies the settlor, trustee and beneficiaries
of express trusts administered in France or in respect of which a trustee is
resident in France.
Foundations (ToR A.1.5)
104. There is no provision for private-interest foundations in French law.
Foundations are non-profit entities established exclusively for public-interest
purposes and are strictly regulated because they may receive public subsidies.
Act 87-751 of 23 July 1987 on the encouragement of philanthropy instituted
public-interest foundations
45
and corporate foundations, whose sole purpose
must be to pursue an endeavour of general interest. A foundation may not
have a commercial or tax purpose. The assignment of assets to a foundation
is irrevocable.
46
French foundations are not considered to be relevant entities
under the Terms of Reference.
47
44. Taxation can be on the income and/or assets of the trust. See written question
n 13738 of Mr. Michel Charasse published in the Senate Official Journal of
16 September 2004.
45. Under Article 18 of the Act, foundation is the act whereby one or more individu-
als or legal entities decide to irrevocably transfer assets, rights or resources for
the accomplishment of a non-profit endeavour in the general interest. Where the
purpose of the act of foundation is to create a legal entity, the foundation shall
have legal personality only as of the date of entry into effect of a Conseil dtat
decree according recognition of public interest, whereupon it acquires the status
of public-interest foundation.
46. If a foundation is dissolved, the net assets are devolved to one or more public or
public-interest establishments whose purpose is to pursue an endeavour in the
general interest.
47. In practice, France has not received any information request relating to a founda-
tion in the last three years.
Other entities and relevant arrangements (ToR A.1.5)
Socits civiles
105. Socits civiles (non-commercial entities) are governed by arti-
cles 1832 and 1845 to 1870-1 of the Civil Code. Members are indefinitely
liable for the companys debts in proportion to their share in the capital and
must therefore all be registered when the company is registered at the district
court registry (article 1857 of the Civil Code and article R. 123-54 of the
Commercial Code).
48
106. There are various types of socits civiles according to activity: man-
agement of assets (property, portfolio), farming, professional activity (law
firms, notaries, etc.), property development, etc. There are over 72 000 socits
civiles in France, representing less than 5% of the total number of French legal
entities.
107. The articles of association must state the form, purpose, name, reg-
istered office, capital and term, each members contribution and the entitys
rules of operation (article 1835 of the Civil Code). The members are therefore
identified when the articles of association are signed and each one receives a
copy (Decree 78-704, article 31(1)).
108. All socits civiles must be registered with the tax administration in
the same way as companies and file their articles of association on incorpora-
tion and in the event of subsequent amendment (article 853 et seq. of the Tax
Code). Socits civiles must also be registered with the Mortgage Registry
(conservation des hypothques) when contributions of real property are estab-
lished in their articles of association. Socits civiles formed for professional
purposes are registered only after they have been approved by the competent
authority or included in the lists or tables of the relevant professional body
(Act 66-879 of 29 November 1966, article 1(3)).
Enforcement provisions to ensure availability of information
(ToR A.1.6)
109. France should have in place effective enforcement provisions to
ensure the availability of ownership and identity information, one possibil-
ity among others being sufficiently strong compulsory powers to access the
information (see Section B below). This subsection of the report assesses
whether the provisions requiring the availability of information with the
public authorities or within the corporate entities concerned are enforce-
able and failures are punishable. Several sets of penalties exist, according
48. See also the company registration forms on www.greffes.com.
to whether the infringement concerns the content of a companys articles of
association, its registration or its tax returns.
110. Articles R. 123-92 to R. 123-101-1 of the Commercial Code contain
provisions relating to the formal control of applications to register commercial
enterprises (companies or partnerships) in the trade and companies register.
Clerks, who are public officers, are responsible for ensuring the orderly nature
of all applications, whether they relate to registration, amendment or removal
of a company or partnership. Inter alia, they must verify that the information
provided complies with the relevant laws and regulations. If they consider that
the application is compliant, registrars must complete the registration within
one working day of receiving the application unless they deem that closer
examination is required, in which case they have five days. Clerks may at any
time verify that registered information continues to be compliant and may
ask an entity to rectify an incorrect registration. If the clerk notes mistakes
or omissions, he/she requires the applicant to correct them and informs the
court. If the required rectifications are not made within one month, the court
orders the person to conform to the law. Failure to comply with the court order
within 15 days is punishable by a fine of EUR 3 750. In addition, knowingly
providing inaccurate or incomplete information is punishable by a fine of
EUR 4 500.
49
A daily fine may also be imposed for as long as the obligation is
not fulfilled (articles L. 123-3 to L. 123-5-1 of the Commercial Code).
111. The pursuit for profit of an economic activity of any kind by any
person who intentionally fails to fulfil a registration requirement or fails to
make mandatory declarations to social security organisations or to the tax
administration constitutes the offence of concealed work, punishable by three
years imprisonment and a fine of EUR 45 000 maximum for natural persons
and a fine of EUR 225 000 maximum for legal persons (articles L. 8221-3 et
seq., articles L 8224-1 and L. 8224-5 of the Labour Code and article 131-38 of
the Penal Code). Making a false declaration also constitutes forgery, a crimi-
nal offence under article 441-1 of the Penal Code.
112. If the required declarations to the tax administration are not made,
the penalties provided for at article 1728 of the Tax Code apply, including
an 80% tax surcharge in the event of concealed activity. That is the case, for
example, in the event of failure to register a French fiducie.
50
Taxpayer com-
49. The omission from the memorandum and articles of association of a public lim-
ited company of the declaration relating to the distribution of the capital shares
among all the partners, the paid-up status of the shares or the depositing of the
funds carries a penalty of two years imprisonment and a fine of EUR 9 000
(article L. 241-1 of the Commercial Code).
50. Article 1728, paragraph 1: Failure to produce within the given time-limit a tax
return or a document indicating the amounts needed to calculate the base or
pliance is very high in France, since 98% of income tax returns and 99.5% of
corporation tax returns are received without a reminder.
113. Ultimately, available sanctions appear to be sufficiently dissuasive to
ensure the effective enforcement of the provisions.
Determination and factors underlying recommendations
Phase 1 Determination
The element is in place.
Phase 2 Rating
[To be finalised as soon as a representative subset of Phase 2 reviews is
completed.]
A.2.Accounting records
Jurisdictions should ensure that reliable accounting records are kept for all
relevant entities and arrangements.
114. Jurisdictions should ensure that reliable accounting records are kept
for all relevant entities and arrangements. Accounting records must (i) cor-
rectly record all transactions, (ii) be such that the financial situation of the
entity or arrangement may be determined with reasonable precision at any
time, and (iii) enable the preparation of financial statements. Accounting
records must be supported by underlying documentation such as invoices,
contracts, etc., be detailed and be kept for at least five years. The sources of
French accounting law are the Commercial Code, the National Accounting
Code (Plan Comptable Gnral)
51
and the Tax Code.
assess the amount of tax shall entail the application to the amount of tax payable
by the taxpayer or arising from the tax return or document filed late of a sur-
charge of: (a) 10% if notice has not been served or if the tax return or document
is filed within thirty days following receipt of notice, served by registered letter,
to produce it within such time; (b) 40% where the tax return or document has
not been filed within thirty days following receipt of notice, served by registered
letter, to produce it within such time [].
51. The National Accounting Code is defined by Accounting Regulation Committee
Regulation 99-03, approved by the Budget Minister. It codifies how accounts
are to be kept with the aim of setting general rules for all firms or a category of
firms. The Code aims to gradually standardise accounting systems.
General requirements (ToR A.2.1)
115. French accounting rules apply to all traders (individuals, partner-
ships and companies) and all private legal persons who, while not being trad-
ers, have an economic activity or are above a certain size. Annual accounts
must be accurate and honest, and present a true image of the assets of the
corporation, of its financial position and profits. The rules described below
thus apply to all companies (SARL, SA, SAS, SCA) and commercial partner-
ships (SNC and SCS) as well as to all entities having an economic activity.
Professional trustees are covered by these obligations.
116. In accordance with the Commercial Code, all traders must enter in
their accounts the movements affecting the assets of their undertaking. They
must make an annual inventory of their assets and liabilities which, with their
accounting records, is used to prepare annual accounts (article L. 123-12 et
seq.). The accounts must be kept in accordance with the ordinary rules for
double-entry book-keeping.
52
117. Commercial entities and socits civiles beyond certain thresholds
53

must prepare annual accounts, drawing up a balance sheet, income statement
and notes for the purpose of precisely determining the companys financial
situation and issuing its financial statements. The balance sheet describes
separately the companys assets and liabilities and clearly indicates owner
equity and, as applicable, other capital funds (article 130-2 of the National
Accounting Code). It is a snapshot of the companys assets and liabilities and
of the result of its activity. The income statement recapitulates expenditure
and income for the financial year, irrespective of their date of payment or
receipt. The notes to the accounts provide explanations, breakdowns and
appropriate documentation to shed light on the balance sheet and income
statement. These documents must be honest and truthful and ensure a fair
representation of the assets, financial situation and results of the undertaking
(article L. 123-14 of the Commercial Code). Most of the rules for these docu-
ments also apply to fiducies.
54
52. In the double-entry system, every transaction or change recorded in the account-
ing system is to be represented by an entry establishing an equivalence between
respective debits and credits to the various accounts affected by the entry
(Article 420-1 of the National Accounting Code).
53. Under Article L. 612-1 of the Commercial Code, socits civiles engaged in an
economic activity that have more than 50 employees and more than EUR 3.1 mil-
lion net of tax in sales or a balance-sheet total of EUR 3 155 000 or more must
draw up a balance sheet, income statement and notes each year in the same way
as traders (Article R. 612-1 of the Commercial Code).
54. Under the Fiducie Act, trustees must prepare the annual accounts of the fiducie in
compliance with Articles L. 123-12 to L. 123-15 of the Commercial Code in the
118. The annual accounts (and, where relevant, the statutory auditors
report) of SARLs and SAs must be put to the shareholders meeting for
examination and approval. In the month after they have been approved, they
must be filed at the court registry for annexing to the trade and companies
register (where they can be consulted by third parties). The same rules apply
to partnerships whose members are SARLs or SAs (articles L. 225-100 and
L. 232-1 to L. 232-6 of the Commercial Code).
119. In the case of general partnerships (SNC) and limited partnerships
(SCS), the annual report, inventory and annual accounts drawn up by man-
agers are submitted for approval to the annual general meeting of members
within six months of the end of the financial year (articles L221-7, L222-2 of
the Commercial Code).
120. Small companies must also maintain accounting books and records.
They may use a simplified presentation of their annual accounts if, at year-
end, they do not exceed two of the following thresholds: a balance sheet total
of EUR 267 000, sales net of tax of EUR 534 000 or 10 permanent employees
during the year (articles L. 123-16 and R. 123-200 et seq.).
55
121. In addition, the transactions of all commercial entities (and all indi-
vidual traders) must be recorded in books:
a journal that records transactions affecting the undertakings assets
and liabilities, daily and transaction by transaction (article R. 123-
174 of the Commercial Code and article 420-4 of the National
Accounting Code). Each accounting entry must state the origin,
content and attribution of each item together with the references to
its supporting documentary evidence;
same way as companies. The General Chart of Accounts also applies to fiducies,
with the exception of certain specific provisions contained in a regulation issued
by the Accounting Regulation Committee.
55. The simplified balance sheet includes: 1 Under-current assets: Intangible assets,
distinguishing goodwill, tangible and financial assets; 2 Under current assets:
stocks and work in progress, the Advances and prepayments, receivables dis-
tinguishing customers, investment securities and cash, 3 prepaid expenses; 4
equity ; 5 Provisions, 6 distinguishing debt: loans and similar debts, advances
and deposits on orders and suppliers; 7 deferred revenue. The simplified income
statement shows, in addition to changes in inventory: 1 Operating expenses
distinguishing between purchases, other external charges, taxes, fees and similar
payments, except tax benefit the remuneration of staff and managers, payroll
and depreciation and amortization, impairments and provisions relating to the
operation, 2 The financial charges; 3 Special charges, 4 The tax on profit; 5
Revenues distinguishing sales of goods, the production sold and operating subsi-
dies; 6 financial products, 7 exceptional products.
a ledger summarising all the accounts opened by the undertak-
ing according to the needs of its activity (article R. 123-175 of the
Commercial Code). Journal entries are posted to the ledger;
an inventory journal that records all the entitys assets and liabilities,
stating the quantity and value of each one at the inventory date; and
a document describing the accounting procedures and organisation,
if it is necessary in order to understand the accounting system and to
monitor the data processing system (articles R. 123-172 to R. 123-177
of the Commercial Code and articles 410-2, 410-6 and 410-7 of the
National Accounting Code).
122. The accounting books of persons that are not considered as traders
are annexed to the Trade and Companies Register (article R.123-111 of the
Commercial Code).
123. Socits civiles must also comply with accounting obligations. Those
that are liable to corporation tax or whose operations are such that they may
be liable to sales taxes must keep accounts so that they are able to provide
the administration with the information required by the Tax Code (article
286, and article 37 of Annex 4). The members of other socits civiles are
personally liable to tax on the portion of corporate profits corresponding to
their corporate rights and must be able, where the amount of such portion is
determined according to the socits real profit, to provide the relevant infor-
mation to the administration. That implies, at least de facto, keeping account-
ing documents backed up by supporting evidence.
56
Some socits civiles
must also comply with specific accounting rules under a regulated chart of
accounts (socits civiles de placements immobiliers, socits coopratives
agricoles, socits civiles professionnelles de notaires).
124. Lastly, as a general rule, any physical or corporate person who
derives profits from his activity
57
is required to pay corporate tax or income
tax. Accordingly, regardless of the nature of his activity (i.e. whether it is
commercial or non-commercial) and irrespective of the accounting require-
ments described above, every year that person must deposit a declaration
proving details of the calculation of his taxable income and must be capable
of providing the tax administration with evidence of all the elements taken
into account to calculate this outcome.
125. Consequently, with regard to the legislation relating to accounts and
tax requirements, France ensures the availability of accounting information
56. Ministerial answer to a question from Mr. Estve, Senate Official Journal,
12 March 1962, p. 60.
57. This provision only applies to persons receiving salaries, pensions, life annuities
or income from movable capital.
allowing all transactions to be accurately tracked, the financial position of all
entities to be established, and the preparation of the financial statements of
all the relevant entities.
Underlying documentation (ToR A.2.2)
126. As mentioned above, entries in the journal must state the references
of the supporting documentary evidence (articles 420-2 and 420-6 of the
National Accounting Code). Each voucher must be dated and established on
paper or by another medium ensuring reliability, retention and clear recon-
struction of its contents. A companys accounting system must also be organ-
ised in such a way that account items, statements and information subject to
examination can be reconstituted from supporting documents evidencing
the data entered and vice versa (articles 420-2 and 420-3 of the National
Accounting Code).
127. The French authorities indicate that supporting documentary evi-
dence may be, for example, public instruments, private instruments, brokers
slips, accepted invoices, correspondence, duplicate invoices (evidencing sales)
and duplicate pay slips (evidencing wages).
128. As France is an EU Member State and hence part of the intra-com-
munity VAT system, French undertakings must fulfil specific requirements
regarding documentary evidence of transactions performed. Inter alia, they
must keep all documents from which intra-community flows of goods and
services can be traced, and, more generally, all invoices.
129. These various requirements ensure that the accounting requirements
of French firms include the requirement of keeping supporting documentary
evidence for the transactions performed.
5-year retention standard (ToR A.2.3)
130. Commercial entities and fiducies must keep accounting documents
and supporting documentary evidence for ten years (article L. 123-22 of the
Commercial Code).
131. The Tax Procedures Code also provides that books, registers, docu-
ments and other instruments with regard to which the administration may
exercise rights of information-gathering and control must be kept for six
years from the date of the last transaction mentioned in the books or registers
or from the date at which the documents or instruments were drawn up (arti-
cle L. 102B).
132. The Tax Procedures Code, implementing Directive 2006/112/EC on
VAT, states that invoices issued by taxpayers or by their customer or, in their
name and on their behalf, by a third party, as well as all the invoices that they
have received must be stored in France, when the storage is not by electronic
means guaranteeing immediate, full online access to the data concerned. If
the information is stored outside France, the taxpayer must inform the admin-
istration where it is stored and may not store invoices in a country not bound
to France by an agreement providing for mutual assistance and for a right to
immediately access online, download and use all the data concerned (article
L. 102C). Otherwise, article R. 85-1 of the Tax Procedures Code states that
companies liable to corporation tax must keep all accounting documents at
the disposal of tax officials.
133. The tax and accounting requirements imposed by French law mean
that the 5-year retention standard for accounting information is complied with.
Implementation of the legal framework and practical aspects
134. In practice, many of Frances treaty partners have asked France for
accounting information and this type of information (accounting documents
and underlying documentation) accounts for 47% of requests from Frances
five main partners. The underlying accounting documentation exchanged
includes contracts and information relating to payments between a French
company and a resident in the partner jurisdiction, prices of goods, invoices
issued by French companies and how they are paid. The partners have indi-
cated, inter alia, that some requests were triggered by a spontaneous exchange
of information by France.
135. None of Frances treaty partners has indicated that they have not
received accounting information they had requested because it was not available.
Phase 2 Rating
completed.]
A.3. Banking information
Banking information should be available for all account-holders.
136. Access to banking information is of interest to the tax administra-
tion only if the bank has useful and reliable information about its customers
identity and the nature and amount of financial transactions.
137. In France, banking information is kept by the banks themselves.
Some information, like the payment of income from transferable securities,
is also automatically transmitted to the tax administration at regular intervals
and incorporated into the administrations databases. In practice, bank infor-
mation represents 40% of all information sent by France to its five main EOI
partners.
Record-keeping requirements (ToR A.3. 1)
138. The chapter of the Monetary and Financial Code on combating
money laundering and terrorist financing (articles L. 561-1 to L. 561-45)
imposes know-your-customer obligations on banks and requires them to keep
documents relating to transactions performed by their customers for five
years. These obligations also apply to their foreign branches and subsidiaries
(article L. 561-34).
139. The tax administration itself possesses a certain amount of banking
information automatically provided by banks in their capacity as declaring
third parties.
58
That occurs, for example, when a bank account is opened,
modified or closed (article 1649A of the Tax Code).
59
This information is
entered into the tax administrations Bank Accounts Database (Fichier des
Comptes Bancaires, FICOBA), which gives the tax administration a list of all
bank accounts held in France by individuals or legal persons, whatever their
jurisdiction of residence.
60
The French tax administration uses the database
for research, control and collection purposes. It also enables the competent
authority to respond promptly to a certain number of information requests.
140. The same rule requires individuals, associations and non-commercial
entities domiciled or established in France, when they file their tax return, to
58. Declaring third parties are persons who declare income they pay to other persons
to the administration. They are typically employers and banks.
59. Payment of income from transferable securities is another example where banks
automatically transmit information to the administration (see the section on
bearer shares above).
60. Anonymous accounts and accounts in a fictitious name are prohibited (Article
L. 561-14 of the Monetary and Financial Code).
declare accounts opened, used or closed in other jurisdictions (article 1649A
of the Tax Code and L. 152-2 of the Monetary and Financial Code), subject to
a fine of EUR 750 per undeclared account (article L. 152-2 of the Monetary
and Financial Code).
Banking information requests in practice
141. In practice, many of Frances treaty partners have indicated they
have received the banking information requested. The requested informa-
tion ranges from the assets owned by an individual to copies of financial
statements and account statements, transaction statements, signatures on
accounts, documents relating to bank loans, copies of cheques, fund transfers
and deposit receipts. France exchanges copies of original documents.
142. Several European partners have pointed out that they receive bank-
ing information from France through automatic exchange of information
under the Savings Directive. Consequently, either they have not had to
submit requests for specific information or the requests they have submitted
to France have arisen mostly as a result of information received via the auto-
matic exchange.
143. France has on occasion turned down requests for banking infor-
mation, in particular when it has not been possible to find the individual
concerned due to incomplete information despite a request for additional
information from the French authority.
Phase 2 Rating
completed.]
COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION 47
B. Access to Information
Overview
144. A variety of information may be needed in a tax enquiry and jurisdic-
tions should have the authority to obtain all such information. This includes
information held by banks and other financial institutions as well as infor-
mation concerning the ownership of companies or the identity of interest
holders in other persons or entities, such as partnerships and trusts, as well
as accounting information in respect of all such entities. This section of the
report examines whether Frances legal and regulatory framework gives the
authorities access powers that cover all relevant persons and information
and whether rights and safeguards are compatible with effective exchange of
information. It also assesses the effectiveness of this framework in practice.
145. The French authorities have many sources of information for iden-
tifying the ownership of legal entities, including annual statements filed
by taxpayers, automatic third-party declarations, the Trade and Companies
Register (Registre du commerce et des socits) and other databases. The
competent authority can thus respond to nearly 40% of information requests
received without resorting to its information gathering powers.
146. The French authorities make use of their powers available for
domestic taxation purposes in order to exchange information. The French
tax administration has broad powers of access to accounting and banking
information and to data on the ownership of legal entities, pursuant to the
Tax Procedures Code (Livre des procdures fiscales, LPF). In particular,
these powers allow the authorities to request information from any taxpayer
and from third parties who may have the information sought, in order to
determine the amount of income in question or to confirm the information
contained in declarations. Banking secrecy is lifted in tax matters.
147. There are enforcement measures available to compel the disclosure
of information, but they very rarely need to be used. This legal framework
allows the tax authorities to collect the information requested by their
48 COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION
partners, and no problems of application in practice have been detected over
the last three years.
B.1. Competent authoritys ability to obtain and provide information
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information).
148. The central competent authority for handling EOI requests received
by France is the General Directorate of Public Finance (Direction gnrale
des finances publiques, DGFIP) responsible for tax administration within
the Ministry of Budget, Public Accounts, the Civil Service and Reform of the
State (Ministre du Budget, des Comptes publics, de la Fonction publique et
de la Rforme de ltat), and more specifically the international affairs office
(Bureau des affaires internationales) of the tax examination branch (Sous-
direction du contrle fiscal, CF3).
149. Treaties override laws (article 55 of the Constitution). Consistent with
the jurisprudence of the Court of Cassation and the Conseil dtat (the high-
est civil and administrative jurisdictions in France), tax treaties and TIEAs
are directly applicable to collect information in response to a request.
61
The
tax administration relies on the domestic information gathering powers
granted by the LPF.
150. The French authorities advise that the competent authority (CF3 or
the attach fiscal, as appropriate) will respond directly to around 40% of
EOI requests received, drawing on information contained in the databases to
which it has direct access, such as Infogreffe, but mainly its own databases.
For example, it is possible to take a natural person and identify all his/her
assets (real estate, securities, etc.), and likewise, in the case of a corporate
person, the administration can immediately determine the identity of the
owners (in most cases). Among these databases are:
Transparence Structure cran (structure transparency screen, TSE) is
a tool for identifying shareholders/partners, enabling the tax adminis-
tration to recreate shareholder/manager links between natural or legal
persons and entities. For a given entity, TSE provides identification
data for the manager(s) and the shareholders/partners and the name
61. Conseil dtat: Nicolo ruling of 20 October 1989 ; Cour de Cassation: Socit
Cafs Jacques Vabre ruling of 24 May 1975. See footnote No. 2 for the text of
article 55 of the Constitution.
of any other undertakings of which the entity is itself a shareholder/
partner. A hypertext link for each item of information gives access to
the data of the named individuals or legal persons, making it possible
to identify the individuals concealed behind shell companies and to
track informal groups.
The Base Nationale des Donnes Patrimoniales (national assets data-
base, BNDP) contains information drawn from instruments and decla-
rations relating to assets, such as articles of association, changes to share
capital, windings-up, mergers, business transfers and business pledges.
From the information, it is thus possible to find out a companys assets.
151. For the remaining 60%, CF3 sends the EOI requests to the local or
national tax office with which the person concerned is registered. This may
be either a management unit or a control unit, depending on whether the cor-
poration or individual concerned is under examination at the time the request
is received. It is these units, then, subsumed under CF3, which apply the tax
administrations droit de communication (see also section C.5.2 of this report
for a discussion of the organisational process).
152. To obtain information it would not already have in its databases, the
tax authorities may use its information gathering powers, primarily the droit
de communication (variously translated as right of discovery and power
of disclosure). The administration may also use the droit de contrle (tax
examination). Consequently, the French administration has access to informa-
tion on the ownership of entities and on accounting and banking data.
Ownership and identity information (ToR B.1.1)
The droit de communication (power of disclosure)
153. Information on the ownership of enterprises (companies, partner-
ships) and socits civiles (non-commercial entities) are often already in the
tax administration files from when companies are registered and update the
submitted information, and also when these entities submit their annual man-
datory declarations. All this information is maintained and update in the data-
bases of the tax administration in real time, including information on fiducies
kept by the national registry of fiducies, managed by the tax administration.
154. If more detailed information is requested from the competent author-
ity, it may use its droit de communication. Article L81 of the LPF establishes
the droit de communication: it allows officials to inspect the documents
and information mentioned in selected articles of the LPF, for purposes of
establishing the tax base and controlling taxes, under the conditions speci-
fied therein. The persons covered by these articles are taxpaying traders
(i.e. businesses), socits civiles and fiducies, as well as persons who pay
fees, copyright royalties or salaries to taxpayers, other public administrations,
establishments subject to supervision by the administrative authority (includ-
ing banks and foundations), lawyers, notaries, etc. It should be noted that there
is no legislative or regulatory provision restricting the period during which the
droit de communication may be exercised.
155. With respect to information on the ownership of entities, LPF article
L85(2) applies the droit de communication to records on the transfer of shares
and bonds. The tax administration may also request corporate documents
from socits civiles (article 94A).
156. The competent authority also has droit de communication over other
public authorities such as the clerks of the commercial courts (on the basis
of article L83), notaries who serve as depositories of articles of association
(article L92), and the bank with which any person either natural or legal
person holds an account (article L83).
157. In the case of fiducies, all information on the fiducie must be reported
to the tax administration upon request, and professional secrecy may not
be invoked (article 15 of Law 2007-211 of 19 February 2007 establishing
fiducies).
62
Moreover, LPF article L96F provides that any person exercising
decision-making power over the fiducie must communicate to the tax admin-
istration, upon request, any document concerning the fiducie contract, and
the secrecy obligation established in article 226-13 of the penal code may not
be invoked.
158. The droit de communication is exercised either by sending a letter or
by having a tax agent visit the companys headquarters to inspect the docu-
ments directly. The company (or individual trader) is required to make copies
of the documents and give them to the agent (LPF article R81-4).
159. As concerns natural persons not already covered above, the admin-
istration can request clarification, i.e. using its authority to require any tax-
payer to provide, within 30 days, information, justification or clarification
relating to a signed tax return (LPF article L10(3)). A refusal to provide infor-
mation may be taken as grounds for a tax examination. Given the administra-
tions other options for obtaining information, this situation does not prevent
France from responding to requests for information.
160. A refusal to disclose documents covered by the droit de communi-
cation is punishable by a fine of EUR 1 500 (regardless of the LPF article
invoked, article 734 of the Tax Code).
62. This obligation applies to fiduciaries and to the founders and beneficiaries of
French fiducies, as well as to any person exercising decision-making powers,
directly or indirectly, over the fiducie. Such persons must keep all information
relating to the fiducie for a period of 10 years after the end of the fiducie contract.
Practical application of the droit de communication
161. In view of the comments received from Frances EOI partners, there
appear to be few requests for information on the ownership of French legal
entities. As the main EOI partners of France are other states of the European
Union, where France has posted tax attachs or where cross-border agree-
ments apply, these requests for information are dealt with by them.
162. In practice, the French authorities have never had to address a case
where the information requested could not be found in their own databases or
gathered from persons listed under LPF articles L81 ff. The French authori-
ties have never been confronted with a refusal to disclose documents.
Accounting records (ToR B.1.2)
Droit de communication
163. In France, companies provide each year to the tax administration,
a statement of earnings in a set of the approximately fifty tables attached to
their tax return (known as the liasse fiscale or tax package), which includes
profit and loss accounts, balance sheet of assets and liabilities. Many com-
panies also file their annual accounts with the greffe (clerk), and these are
accessible to the tax administration. Other accounting documents are retained
by the entity itself, and in responding to an EOI request the competent author-
ity will exercise its droit de communication.
164. The tax administration has a droit de communication specifi-
cally relating to accounting information. Articles L85 and L94A, govern-
ing traders and socits civiles,
63
provide for the disclosure of accounting
documents. Article L85 covers not only the books that must be kept pursu-
ant to articles L123-12 to L123-28 of the Commercial Code but also all the
related books and documents, including revenue and expenditure vouchers.
Accounting information can also be requested from some third parties, such
as the court registries (greffe), which receive the annual accounts of some
entities (article L83).
165. When it comes to fiducies, as noted above, these are required to pro-
vide the tax administration, upon request, with any information relating to
the fiducie, which includes accounting information (article 15 of Law 2007-
211 establishing fiducies).
64
63. Article L94A targets the accounting documents of socits civiles, when they
exist, and other revenue and expenditure vouchers they may hold relating to their
business.
64. LPF article 96F requires the disclosure of any document relating to the fiducie
contract, but this may not cover accounting documents. The tax authorities
166. As for documentation on the ownership of entities, the tax authority
may either request accounting information by mail or send an officer to copy
the documents in paper or electronic format. The droit de communication is
a point process limited to the passive taking of information (obtaining copies
of documents). The tax authority may also request clarifications.
Tax examinations
167. The purpose of a tax examination is not to respond to a request
for information, even thought the authorities could use it for such purpose.
There are cases where particularly complex requests for information lead the
French authorities to conduct a tax examination, if deemed appropriate. More
generally, when a French tax examination is being performed on an entity or
person concerned by a request for information, the auditor in charge of the
examination will be advised of the EOI request and will seek the requested
information in the course of the examination, whether this involves an
accounting review or a search (see below section B.1.4).
168. The accounting review (vrification de comptabilit) stipulated in
LPF article L13 involves an on-site examination of a companys accounts and
a comparison with existing data in order to verify the accuracy and honesty
of the declarations submitted. The audit covers the returns made over the last
three to ten years, depending on the circumstances. As this procedure entails
consequences that may be more serious than a droit de communication, i.e. a
tax adjustment, it also triggers supplementary guarantees for the taxpayer,
including assurance that the companys accounts will not (as a general rule)
be examined more than once for the same time period and the same tax (LPF
article L51).
169. If an accounting review is ongoing, but some elements requested by
an EOI partner are older than three years, the French authorities use the droit
de communication to obtain them. Similarly, if France receives a request
for accounting records concerning an entity that has been the object of an
accounting examination, this does not prevent the competent authority from
applying the droit de communication.
Frequent application of the droit de communication
170. Accounting records are among the most frequently requested docu-
ments: they account for 47% of information requests from Frances five
principal EOI partners. The comments received from other partners of France
confirm that they also make frequent requests for accounting information or
documentation substantiating the accounts. One partner said it had received
make use of the broader provision, i.e. article 15 of the law of 2007.
authenticated copies as well as the originals of accounting documents. France
reports that it is very rare for a company to refuse to provide documents
requested under the droit de communication, and the few such cases have
triggered a tax examination. Moreover, there has never been a case where
another public administration has refused to communicate information to the
tax authority.
65
171. The French authorities have sometimes used their power pursuant to
article L10 to demand clarification when the documents requested were not
covered by the droit de communication, such as when one partner requested
the transmission of memos and briefings from the internal meetings of a
company.
66
The documents were supplied by the persons concerned.
172. The competent authority in France has occasionally used the account-
ing review procedure, most frequently when a French tax examination was
already underway, but also, occasionally, to respond to a request for informa-
tion when the request could not be satisfied by the mere copying of docu-
ments for example. A few cases of non-response to a droit de communication
have also triggered a tax examination, as a result of which the documents
requested have been collected and transmitted to the requesting authority.
176. As indicated in section A.2 on accounting, France has responded to
all requests for accounting information received over the last three years,
apart from one case for which partial information was provided to the
requesting partner.
Information exchange in the absence of domestic interest
(ToR B.1.3)
177. The concept of domestic tax interest describes a situation where
a contracting party to a tax treaty or TIEA can only provide information to
another contracting party if it has an interest in the requested information for
its own tax purposes.
178. French legislation does not contain any such restriction limiting the
use of domestic information gathering powers for the purposes of the French
tax administration.
65. The competent authority does not always exercise its droit de communication
directly vis--vis the company concerned. In at least one case it requested and
received information on a companys accounts from the customs service.
66. Documents of this type can also be obtained in the course of an on-site search
(See B.1.4).
Enforcement powers (ToR B.1.4)
Sanctions for non-disclosure
179. Refusal on the part of a person covered by the droit de communica-
tion to disclose documents requested by the administration results in liability
for a fine of EUR 1 500 (CGI article 1734). Moreover, any deliberate attempt
by the taxpayer to prevent the tax administration from exercising its functions
constitutes a criminal offence punishable by a fine of up to EUR 25 000.
67
In
addition to the fine, a taxpayer who refuses to co-operate may be subjected
to a tax examination.
Search and seizure
180. The on-site inspection procedure, authorised and overseen by a judge
(also known as a tax search) is intended to gather proof in certain serious
cases of fraud that are exclusively of a tax nature (LPF article L16B).
68
This
procedure allows the authorities to inspect all premises, even private prem-
ises, and to seize all documents (copies of computer files, hard drives, etc.)
that might reveal a suspected fraud, in particular those that would not be
submitted in the context of an accounting review (double bookkeeping that
might reveal the actual volume of business, exchanges of correspondence,
e-mail messages or other messages between participants in the fraud, docu-
ments describing the fraudulent scheme, false invoices, etc.).
Use of enforcement measures
181. The competent authority in France has not needed, over the last three
years, to impose a tax fine or to undertake a tax search in order to respond to
an EOI request.
Secrecy provisions (ToR B.1.5)
182. France has various legal provisions imposing professional secrecy (on
banks, lawyers, accountants, etc.), and any violation of that secrecy consti-
tutes a criminal offence punishable by up to one year of imprisonment and a
fine of EUR 15 000 (articles 226-13 and 226-14 of the Penal Code).
67. The notion of difficulty is not in itself sufficient. In the case of a repeat offense
the court may also order a prison penalty of six months (CGI article 1746).
68. When it comes to the VAT, the administration has a procedure for inspection
without notice (droit denqute, LPF article L80) that allows tax officials to
investigate violations of invoicing rules.
Banking secrecy
183. All employees of financial institutions are covered by professional secrecy
by virtue of article 511-33 of the Monetary and Financial Code, the breach of
which entails the above-mentioned criminal penalties. However, banking secrecy
cannot be invoked against the tax administration, which may apply its normal
information gathering powers to banks just as it does to any other taxpayer.
184. Thus, pursuant to article L85 of the LPF, tax officials may require
taxpayers, including banks and financial institutions, to disclose all their
accounting records, as a well as the statements of private accounts of indi-
viduals or companies, and copies of the face and reverse sides of checks.
185. Pursuant to LPF article L83, the administration can also require
banks
69
to disclose internal documents that go beyond accounting records, such
as proxy forms and specimen signatures (persons with powers of attorney over
an account) or contracts for opening an account, any guarantees that may have
been constituted (bonds or cash) in the context of setting up a loan or overdraft
privileges, or vault visit records. The bank is not bound by any obligation of
discretion and it may inform its customer of the tax authorities request for
disclosure; the bank itself is not however advised of the reason for the request.
186. Lastly, pursuant to article L96A of the LPF and article L152.3 of the
Monetary and Financial Code, the administration may require banks to disclose
information on capital transfers by French residents to a foreign destination or
to non-resident accounts for which they are the depositories. This information
includes the date and amount of the sums transferred, the identity of the initia-
tor of the transfer and of the beneficiary, as well as references for the accounts
concerned in France and abroad.
70
Other professional secrecy requirements
187. Among other legal provisions imposing professional secrecy in France
are those involving the legal profession (see below), as well as accountants and
auditors, for which the scope of secrecy is not defined by law.
71
69. Banks are institutions or agencies of any kind subject to control by the admin-
istrative authority.
70. In addition to the criminal penalties of article 226-13 of the penal code, violations
of the droit de communication stipulated in LPF article L96A are punishable by
a fine equal to 50% of the undisclosed amounts, pursuant to GCI article 1740 bis.
If the taxpayer can prove that there has been no loss to the public purse, the fine
will be reduced to 5%, with a ceiling of EUR 750, for the first offence. This is
generally the case in EOI situations.
71. Article 21 of Ordonnance 45-2138 of 19 September 1945 for accountants; article
L820-5 of the Commercial Code for auditors.
188. The professional secrecy obligations of attorneys are defined by article
66.5 of Law 71-1130 of 31 December 1971, which covers the fields of legal
advice and defence:
72
Regardless of the subject matter, whether advice or liti-
gation, all correspondence exchanged between lawyers and clients and between
lawyers and their colleagues (except where it is marked official), memoran-
dums and, more generally, any documents on the file are covered by profes-
sional secrecy. The expression any documents on the file covers, according
to the case law developed by the Cour de cassation, handwritten notes of the
attorney in preparation of a litigation and draft correspondence.
73
189. This provision applies to independent attorneys and not to in-house
legal counsels of companies. Secrecy does not apply to information held by
lawyers as fiduciaries. Law 2007-211 of 19 February 2007 establishing fidu-
cies (article 15) and LPF article L96F, in fact expressly waive the obligation
of professional secrecy for fiduciaries, regardless of their profession (banker,
lawyer etc.).
190. When the tax administration exercises its droit de communication,
lawyers, accountants and auditors are required to provide information on
attorney-client transactions between themselves and the company (LPF arti-
cle L86). In addition, pursuant to LPF article 13OA, the tax administration
may ask these professionals any information in relation to the amount, date
and type of payment concerning their professional earnings, whatever their
nature. The lawyer and the accountant cannot provide information that does
not specifically relate to them or that they do not hold, for example a custom-
ers accounts held by an accountant. French law requires that such informa-
tion is kept by the companies themselves and not by these professionals. The
tax procedure law provides that businesses, and not these professionals, must
make this information available to the administration.
Professional secrecy has no practical impact
191. In practice, professional secrecy has never been an obstacle to an
exchange of information. This reflects the fact that secrecy is waived vis-
-vis the tax administration (for banks), on one hand, and the fact that the
information in the possession of persons bound by professional secrecy is
available through other channels in France (in the case of legal and accounting
professionals).
72. The barrister and solicitor professions in France were merged 20 years ago.
Except when lawyers are acting in a fiduciary capacity, professional secrecy
applies to all their activities.
73. Cass. com., 5 May 1998, St Value investing partners inc., appeal n 96-30116.
192. When it comes to banking information, several of Frances treaty
partners said they had received the banking information requested (see
section A.3). In practice, only a portion of the information was transmitted
pursuant to the droit de communication as the French tax authorities have a
great deal of banking information in their possession: they receive automatic
reports (such as interest paid on customers savings accounts), and they also
have access to a centralised database (FICOBA) listing the accounts held in
France by natural or legal persons, whatever their place of residence.
193. In the case of banks, the droit de communication is exercised on site
by specific units: the Brigade de recherche systmatique (systematic research
brigade) of the National Tax Investigation Division (DNEF) in Ile-de-France
(Paris region) and the Departmental Inspection and Research Brigades, in the
case of accounts held by banks outside that region. One DNEF representative
interviewed during the on-site visit said he had never encountered a refusal
to respond. The banks regularly submit the documents requested, either as
originals or as photocopies. Naturally, the competent authority can exchange
information contained in the FICOBA databases more promptly than informa-
tion that must be obtained from the banks, and in the case of mixed requests,
the French authorities may provide information in stages.
Phase 2 Rating
To be finalised as soon as a representative subset of Phase 2 reviews is
completed.
B.2. Notification requirements and rights and safeguards
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information.
Rights and safeguards should not unduly prevent or delay exchange
of information (ToR B.2.1)
194. No legal provision provides for the notification of the person who is
the subject of an information gathering measure, including in the framework
of EOI. Some tax treaties, and all TIEAs, allow for the disclosure of informa-
tion received to the person concerned, but they do not require this.
195. When the competent authority uses its droit de communication, the
person concerned, if aware of the measure, may bring proceedings challeng-
ing whether the authority is acting within its power (in front an administra-
tive court), although this proceeding does not have suspensive effect. The
administration could provide the requested information in any case. No such
proceedings have ever been brought in practice. However, the person con-
cerned cannot challenge the sending of information to the foreign competent
authority, since this person is not notified of this action.
74
196. In practice, France responds to a great many EOI requests without
advising the person concerned. If the information requested is not available
in one of the databases to which the administration has access, it will be
requested from the person concerned, but the competent authority will not
reveal that the request flows from an EOI request. The French authorities
indicated that they would authorise the foreign authorities to communicate
their response to the taxpayer in the requesting jurisdiction.
197. In a few cases, in light of the great volume of information sought,
the competent French authority has requested its treaty partner whether they
could inform the person concerned about the existence of the request, in order
to speed the information gathering process.
Phase 2 Rating
completed.
74. Conversely, when the French tax authorities receive information from a partner
and it leads to a tax adjustment for a taxpayer taxable in France, he/she may chal-
lenge the re-assessment if the exchange of information has not complied with the
treaty, laws and regulations providing for the exchange of information.
COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION 59
C. Exchanging Information
Overview
198. Jurisdictions generally cannot exchange information for tax purposes
unless they have a legal basis or mechanism for doing so. A jurisdictions
practical capacity to effectively exchange information relies both on having
adequate mechanisms in place as well as an adequate institutional frame-
work. This section of the report assesses Frances network of EOI agreements
against the standards and the adequacy of its institutional framework to
achieve effective exchange of information in practice.
199. France has a vast network of agreements with 142 jurisdictions con-
taining provisions governing the exchange of information for tax purposes,
and has embarked on an extensive drive to reform its treaties so as to bring
the older ones up to international standards. The network covers all of Frances
major economic partners, members of the European Union and of the OECD,
as well as many financial centres and most members of the Global Forum.
France has never refused to sign an EOI agreement with another member of
the Global Forum. In practice, most of these instruments have not been used
over the last three years for purposes of obtaining information from France:
80% of the requests recorded by France have come from other members of the
European Union; Belgium, the United Kingdom and Spain alone account for
more than half of these requests.
200. Among the instruments France has in place with its major partners,
the treaty with Belgium is the only one that is not up to standard, as Belgium
has not yet ratified the protocol allowing it to exchange banking information.
201. All EOI mechanisms and the French law include confidentiality
provisions. These provisions apply equally to the information and documents
contained in any request received by France as they do to the replies actually
sent to the partner. Moreover, the treaties and TIEAs concluded by France
guarantee that the parties involved will not be obliged to reveal informa-
tion regarding an industrial, business or professional secret, or confidential
60 COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION
communications between a client and an attorney, or to disclose information
that would be contrary to public policy (ordre public).
202. One point has triggered some comments from Frances partners,
on the timeliness of the responses. The French authorities rarely advise the
requesting authorities of developments in the case when the processing of
the request exceeds 90 days. Further, it seems that France could do more to
strengthen its organisational process in order to reduce response times, for
example by ensuring that the units responsible for gathering information
respect the set internal deadlines.
C.1. Information exchange mechanisms
Exchange of information mechanisms should allow for effective exchange of information.
203. France is party to EOI mechanisms of many types bilateral,
European Union and multilateral. France has signed 113 tax treaties, of which
only two are not currently in force. France also signed 28 TIEAs between
March 2009 and February 2011,
75
and 16 of these are already in force (see
Annex 2).
204. France is a party to the joint OECD/Council of Europe Convention,
and a signatory to its 2010 protocol.
76
205. France has bilateral treaties with all Member States of the European
Union, except Denmark. However, information may be exchanged with
Denmark through the provisions of Directive 77/799
77
(or the joint OECD/
75. One TIEA, signed with Netherlands Antilles is now applicable to Curaao and St
Marteen.
76. Convention on Mutual Administrative Assistance in Tax Matters, the parties to
which are Azerbaijan, Belgium, Denmark, Finland, France, Iceland, Italy, the
Netherlands, Norway, Poland, Sweden, Ukraine, the United Kingdom and the
United States. This treaty will be consistent with the standard once the protocol
will have entered into force. France is also a party to various bilateral treaties.
When there are two or more instruments in force between France and a partner
jurisdiction, as in this case, any discrepancy between the instruments will usu-
ally be settled by one of them. Thus, the above-mentioned convention provides
(article 27) that the possibilities of assistance provided by that convention do
not limit, nor are they limited by, those contained in any other international
agreements.
77. Council Directive 77/799/EEC of 19 December 1977 concerning mutual assis-
tance by the competent authorities of the member states in the field of direct
COE convention). France is bound by Community law, in particular the
Mutual Assistance Directive 77/799/EC, the Savings Directive 2003/48/EC
and Community Regulation 1798/2003 on VAT. It should be noted that, pur-
suant to a ruling of the European Court of Justice, tax treaties (like any other
domestic provisions), as an element of the domestic law of a Member State of
the EU, must not be contrary to the requirements of Community law.
78
If on
the other hand the Directive is more restrictive than a treaty, the treaty will
take precedence, pursuant to article 11 of the Directive, which states that its
provisions do not affect the performance of broader obligations to exchange
information as a result of other legal instruments. France can also exchange
information with its EU partners on matters relating to income tax, wealth
and VAT, on a basis of reciprocity, pursuant to LPF article L114A.
206. The Department for European and International Affairs of the Tax
Policy Directorate is responsible for negotiating EOI instruments, while the
International Affairs Office (CF3) of the Department of Tax Examination is
the body responsible for handling requests for information. These two entities
fall under the General Directorate of Public Finance. The French authorities
have sought to optimise efficiency by locating the information exchange
function within the most closely comparable domestic taxation area, i.e. tax
examination.
207. The French authorities have adopted an administrative assistance
manual relating to direct taxation, specifying certain interpretations to the
rules and providing directives with respect to the exchange of information,
although this is essentially focused on outgoing requests. Indeed, outgoing
requests are handled in a decentralised manner: those tax offices that need
information from abroad may request it through one of the units with del-
egated responsibility.
208. There is no need for the obligations deriving from tax treaties to be
transcribed into domestic law in order for the tax authorities to exchange
information, as those treaties prevail over French laws (Article 55 of the
Constitution). Nevertheless, LPF article L114 stipulates that the competent
authority may exchange information with its treaty partners, thereby relieving
it of its professional secrecy obligation.
79
taxation and taxation of insurance premiums. This directive is to be replaced
shortly by a new directive that is consistent with the standard. Denmark termi-
nated its tax treaty with France in 2008.
78. Ruling of the Court of Justice of the European Communities of 12 May 1998,
case C-336/96 (Gilly), which held that double tax conventions must not, like any
other domestic provisions, run counter to the requirements of Community law.
79. The tax administration may exchange information with states that have concluded
with France a convention on mutual assistance in tax matters for the exchange of
Other forms of information exchange
209. In addition to exchanging information upon request, France exchanges
information automatically and spontaneously. Automatic (or ex officio)
exchanges are by far the most numerous, and more than two millions items
are exchanged every year with 20 or so partners, as well as under the Savings
Directive. This has an impact on the volume and nature of information requests:
on one hand, exchanging information automatically reduces the number of
requests by anticipating them. Automatic exchanges can also spark requests that
would not otherwise have been made, if the information thus supplied allows a
foreign tax authority to detect situations that deserve investigation.
210. Finally, France exchanges information spontaneously with its treaty
partners. Without the need for a prior request, it transmits available infor-
mation revealing the existence of income taxable in another jurisdiction,
providing details on the wealth or lifestyle of a non-resident, or suggesting
evidence that a fraud has been committed in the other state. As with auto-
matic exchange, several of Frances partners indicated that the information
sent spontaneously by France had led to requests for additional information.
211. Simultaneous tax examinations are possible within the European
Union if several Member States have a mutual or complementary interest in
the situation of one or more taxpayers. In this case each Member conducts
an examination within its own territory and exchanges the information thus
obtained. This procedure is used whenever such examinations appear more
effective than separate investigations.
80
212. France participated to 14 multilateral tax examinations in 2008 and
2009 and made 13 administrative investigations with foreign partners in 2009.
Standard of foreseeable relevance (ToR C.1.1)
213. The international standard for exchange of information envisages
information exchange upon request to the widest possible extent. Nevertheless
it does not allow fishing expeditions, that is to say speculative requests for
information that have no apparent nexus to an open inquiry or investigation.
The balance between these two competing considerations is captured in
information with the French administration, an expression which covers both tax
treaties (DTC) and TIEAs. This provision also allows the exchange of information
with the financial administrations of other subnational governments within France,
under a specific tax regime, without the need for a signed treaty.
80. Simultaneous audits mainly relate to VAT issues concerning multinational corpo-
rations (on the basis of EC Regulation 1798/2003), direct taxes (Directive 77/799)
and excise duties (Directive 2073/2004).
the standard of foreseeable relevance which is included in paragraph 1 of
Article 26 of the OECD Model Tax Convention
81
set out below:
The competent authorities of the contracting states shall exchange
such information as is foreseeably relevant to the carrying out
of the provisions of this Convention or to the administration
or enforcement of the domestic laws concerning taxes of every
kind and description imposed on behalf of the contracting states
or their political subdivisions or local authorities in so far as
the taxation thereunder is not contrary to the Convention. The
exchange of information is not restricted by Articles 1 and 2.
214. Only the most recent treaties contain the term foreseeably relevant.
Most of the treaties signed by France employ the term necessary, others use
the word relevant or useful. Pursuant to the commentary to Article 26 of
the OECD Model Tax Convention, the terms necessary or relevant are
considered equivalent to the expression foreseeably relevant. France con-
firms that it supports this interpretation and it extends it to the phrase useful
information present in some treaties.
215. The protocol to the France-Swiss treaty which recently came into
force replaces the article on exchange of information by an article consistent
with the standard. It also inserts a point XI in the additional protocol to the
treaty that fleshes out this article
82
and lists the information that the request-
ing party must provide with its request for information, including the name
and address of the person targeted by the examination or the investigation
and, if available, any other element that might facilitate identification of the
person (date of birth, civil register data, etc.). The French authorities indicate
that they will answer to EOI requests of their partner as long as it includes
any element allowing the identification of the person concerned. Similarly,
the additional protocol specifies that the name and address of any person
believed to be in possession of the requested information should be provided
with the EOI request to the extent known.
216. The France-Bolivia treaty restricts the exchange of information
to application of the provisions of this Convention. It thus excludes the
exchange of information not related to a double-taxation situation. That
treaty, therefore, does not conform to the standard.
81. OECD Model Tax Convention on Income and Capital, July 2010.
82. Thus, according to the new point XI in the additional protocol, the reference to
foreseeably relevant information is intended to ensure that the exchange of
information in tax matters is as broad as possible, without allowing contracting
parties to go on fishing expeditions or to ask for information that is unlikely to
be relevant for clarifying the fiscal affairs of a given taxpayer.
217. In practice, the French authorities apply the foreseeably relevant con-
cept and its fishing expedition corollary in a reasonable manner consistent
with the standard. They do not conduct any systematic, detailed verification of
the justification of a request, unless the request differs from the requests usu-
ally received, or it contains particular elements that require the attention of the
officer responsible for the request. Generally speaking, before responding or
transferring the request to a specific tax unit, the competent authority verifies
that the purpose of the request is clearly stated for example, where there is an
ongoing examination or serious grounds for considering one.
218. On a few occasions, France has refused to supply the information
requested, on grounds of insufficient relevance, especially where requests
concerned an undefined category of persons rather than identified indi-
viduals. Following explanations offered by France, the partners concerned
have accepted this refusal and have reformulated their request or provided
further details. France also refused to retrieve and transmit information to
one partner on the grounds that the partner had not conducted an investiga-
tion before submitting the request. The jurisdiction concerned accepted this
argument and reformulated its request after having conducted the required
investigation.
In respect of all persons (ToR C.1.2)
Residents and non-residents
219. For exchange of information to be effective it is necessary that a juris-
dictions obligation to provide information is not restricted by the residence
or nationality of the person to whom the information relates or by the resi-
dence or nationality of the person in possession or control of the information
requested. For this reason the international standard for exchange of informa-
tion envisages that EOI mechanisms will provide for exchange of information
in respect of all persons and paragraph 1 of Article 26 of the OECD Model
Tax Convention indicates that the exchange of information is not restricted by
Article 1, which defines the personal scope of application of the Convention.
83
220. Some French tax treaties do not contain this sentence. The article on
information exchange nevertheless applies to residents and non-residents of
the parties, to the extent that it applies to the provisions of this Convention,
or of the domestic laws of the Contracting States concerning taxes covered
by the Convention insofar as the taxation thereunder is not contrary to the
Convention. These treaties, then, do not limit EOI to residents of the con-
tracting parties, because their domestic tax legislation applies to all taxpayers
83. DTCs apply to persons who are residents of one or both of the Contracting States.
(and to third parties, with respect to access to information), resident or not,
(e.g. domestic laws also tax the domestic income of non-residents). Other
treaties contain similar wording referring to domestic laws. Exchange of
information in respect of all persons is thus possible under these treaties.
84

The French authorities confirmed that they adhere to this interpretation.
221. The France-Bolivia treaty restricts the exchange of information to
application of the provisions of this Convention. Because its first article
restricts the application of the convention to residents of the contracting
parties, this treaty does not allow exchange of information concerning non-
residents. On this point again, the treaty does not comply with the standard.
222. In practice, the competent authority seeks to determine, first, whether
the person concerned is a French taxpayer, and if this is not the case it attempts
to find the person concerned by using publicly accessible databases such as
the telephone book or the civil status registry. The authorities pay just as much
attention to requests concerning non-taxpayers as to those concerning taxpay-
ers, as such a situation may conceal a case of tax fraud in France. In one case,
France did not reply to an EOI request, on the grounds that the person con-
cerned had no ties to France. In that case, a foreign authority had asked France
to provide accounting records on the foreign subsidiary of a company resident
in France. France indicates that in cases of this kind it considers that the
requesting party should first seek information from the jurisdiction in which
the foreign subsidiary is located, whenever possible, before turning to France.
Geographical scope of application
223. As indicated in the introduction, the French Republic comprises vari-
ous territorial entities, and only the European and overseas dpartement are
covered by EOI instruments. Some of the older (and little-used) tax treaties
do not cover the overseas dpartement,
85
while other treaties may not auto-
matically cover Mayotte upon its accession to the status of dpartement.
86

Although these shortcomings have little practical impact, France is advised
to update these treaties in the context of its treaty policy.
84. Moreover, Directive 77/799 applies to some treaties, and contains no restriction
on the persons targeted.
85. Treaties with Malawi and Zambia, from 1953. These partners have never requested
information from France, and the treaties are rarely used.
86. The DTCs and TIEAs covering Metropolitan and overseas dpartements will
apply automatically to Mayotte, but not the treaties (for example those with
Benin, Brazil and Israel) that name the four existing overseas dpartements. The
French authorities will need to take measures to extend application of these trea-
ties to Mayotte.
Obligation to exchange all types of information (ToR C.1.3)
224. French domestic law places no restriction on the exchange of infor-
mation with partners. The competent authority may communicate any kind of
information to its partners, even when the DTC does not contain paragraphs
4 and 5 of Article 26 of the OECD Model Tax Convention.
Banking information
225. Only the most recent French tax treaties
87
contain a provision simi-
lar to Article 26(5) of the Model Tax Convention. However, the absence of
this phrase in the other treaties does not automatically create restrictions on
exchange of bank information. The commentary to the Model Tax Convention
indicates that whilst paragraph 5 (added in 2005) represents a change in the
structure of the article, it should not be interpreted as suggesting that the pre-
vious version of the article did not authorise the exchange of such information.
226. As French domestic law contains no restriction on the exchange of
information, the competent authority exchanges banking information in the
context of its tax treaties on a basis of reciprocity (paragraph 3 of the Model),
i.e. when the domestic law of the requesting party allows, as does French law
(see part B), for such information to be accessed and exchanged.
227. Austria,
88
Belgium, Botswana and Lebanon are unable to access
banking information for EOI purposes, in the absence of an explicit provi-
sion in their treaties (i.e. reciprocity does not apply). The French treaties
with these jurisdictions are therefore not up to the standard, but France is in
the process of amending them: A protocol with Belgium was negotiated in
2009 (and is now pending ratification by Belgium) and protocols have been
initialled with Austria and Botswana. The treaties with Lebanon should also
be amended. Finally, in Trinidad and Tobago access to bank information can
only occur when there is an ongoing tax assessment and an objection to the
assessment by the taxpayer.
87. Treaties with Australia, Bahrain, Germany, Japan, Kenya, Luxembourg, Malaysia,
Malta, Qatar, Singapore, Switzerland, the United Kingdom and the United States.
88. Austria, Belgium and Luxembourg are the three EU member states that were
granted dispensation from the automatic information exchange mechanism under
the Directive of 3 June 2003 on harmonisation of the taxation of savings. They
are thus exempt from this automatic EOI obligation but, on the other hand, they
must pay other member states an annual amount corresponding to a withholding
tax on the savings income covered by the Directive. It should be noted, however,
that Belgium has been exchanging banking information automatically under the
Directive since 1 January 2010.
Absence of domestic tax interest (ToR C.1.4)
228. The concept of domestic tax interest describes a situation where a
contracting party can only provide information to another contracting party
if it has an interest in the requested information for its own tax purposes. An
inability to provide information based on a domestic tax interest requirement
is not consistent with the international standard. Contracting parties must use
their information gathering measures even though invoked solely to obtain
and provide information to the other contracting party.
229. Most of the tax treaties signed by France do not contain paragraph 4 of
Article 26 of the Model Tax Convention, requiring contracting parties to use their
information gathering measures to obtain the requested information, even though
they may not need such information for their own tax purposes. The 20 TIEAs
concluded by France contain a similar provision,
89
as do the protocols recently
signed, for example, with Switzerland, Belgium, Luxembourg and Bahrain.
230. When this paragraph was added to the Model in 2005, the intent was
to make explicit an obligation that already existed in practice, and France is
in a position, even without this paragraph, to exchange information with its
partners without reference to any domestic tax interest.
231. Some treaties provide for the exchange of information which the tax
authorities have at their disposal (Benin, Burkina Faso, Cameroon, Central
African Republic, Ivory Coast, Mali, Niger, Morocco, Mauritania, Senegal,
Togo). Differing interpretations are possible: either the exchange will be
restricted to the information contained in the tax authoritys files (in which
case a domestic tax interest requirement exists), or the exchange will cover
all information to which the tax authority has access. The French authorities,
for their part, favour the second interpretation.
Absence of dual criminality (ToR C.1.5)
232. The dual incrimination principle states that assistance can only be
provided if the conduct being investigation (and giving rise to an information
request) would constitute a crime under the laws of in the requested jurisdiction if
it had occurred in that jurisdiction. In order to be effective, information exchange
should not be constrained by the application of the dual criminality principle.
89. The TIEAs provide that if the information in the possession of the competent
authority of the requested party is not sufficient to enable it to comply with the
request for information, that contracting party shall use all relevant informa-
tion gathering measures to provide the requesting party with the information
requested, notwithstanding that the requested party may not need such informa-
tion for its own tax purposes (Article 5(2)).
233. The French TIEAs provide expressly that the principle of dual criminal-
ity is not a condition for exchanging information.
90
The tax treaties are silent on
this subject (as is French law) and they therefore do not require the application
of a principle of dual criminality. This question has never arisen in practice.
Exchange of information in both civil and criminal tax matters
(ToR C.1.6)
234. Communicating information may be necessary for both tax admin-
istration purposes and for tax criminal purposes. The international standard
provides for both types of procedures.
235. The EOI mechanisms concluded by France provide for the exchange
of information for both criminal and civil purposes. The TIEAs make express
provision to this effect in their article 1.
Providing information in a specific form requested (ToR C.1.7)
236. There are no restrictions in the information exchange mechanisms
established by France that might prevent it from providing information in the
form requested, as long as this is consistent with its administrative practices.
The French TIEAs contain, in their article 5(3), a stipulation concerning the
provision of information in a form specifically requested by a contracting
party in order to meet its requirements for proof or other legal requirements,
to the extent allowable under the law of the requested party. This may include
depositions of witnesses and authenticated copies of original records.
91
237. In practice the French authorities, when they receive such a request,
will transmit the information requested in the form desired. However, they
are not in a position to provide depositions from witnesses, as this possibil-
ity does not exist in French tax law.
92
On the other hand, anything written
or transmitted by duly sworn tax officials has the same value as a witness
deposition or a certified copy, and can be used in court.
90. The TIEAs provide that information must be exchanged without regard to
whether the requested party needs such information for its own tax purposes or
the conduct being investigated would constitute a crime under the laws of the
requested party if such conduct occurred in the requested party. (Article 5(1)).
91. The protocol to the treaty with the United States contains a similar provision.
92. Taking of witness testimony involves a criminal, non-tax procedure.
In force (ToR C.1.8)
238. Exchange of information cannot take place unless a jurisdiction has
EOI arrangements in force. Where EOI arrangements have been signed, the
international standard requires that jurisdictions take all steps necessary to
bring them into force expeditiously.
239. Most of the French treaties, protocols and agreements are in force.
Only 15 were not in force at 28 February 2011. These include the protocol
with Belgium and a few recently agreements ratified by France that will come
into force as soon as the other party has completed its domestic ratification
procedures.
93
240. It should be noted that, while French ratification may have taken a
long time in the past, special efforts have been made in the last two years to
speed up the process through better co-ordination of the authorities involved
(Ministry of Finance, Ministry of Foreign Affairs, General Secretariat of
Government) and presentation in batches to the Council of State (Conseil
dtat) and Parliament, whenever possible. Once Parliament has adopted the
ratification law, the President of the Republic promulgates it and the authori-
ties of the other contracting party are informed through official channels.
94

Today, the average time between the signature of an arrangement and its
entry into force is 12 months (seven months for the latest ones that entered
into force), and the only instruments pending ratification are those that were
signed since September 2010.
241. The measures instituted to speed the entry into force of arrangements
include arranging for signature by exchange of letters, particularly for TIEAs,
as well as signature by ambassadors, but Frances partners do not always
accept these forms of signature.
93. The arrangements waiting for Frances ratification are the protocol with Saudi
Arabia (signed in September 2010) and the agreement with Hong Kong (China)
(signed in October 2010), and the TIEAs with Anguilla, Belize, Brunei, Costa
Rica, Curacao, Dominica, the Cook Islands and St. Maarten (signed in 2010), and
Liberia (signed in 2011). The following TIEAs have been ratified by France only:
Grenada, Turks and Caicos, and St. Vincent and the Grenadines.
94. Pursuant to Article 53 of the Constitution, treaties or agreements committing the
finances of the State may be ratified or approved only by an Act of Parliament
virtue of a law.
Effectiveness through legislation (ToR C.1.9)
242. For information exchange to be effective the parties to an EOI
arrangement need to enact any legislation necessary to comply with the terms
of the arrangement. Once a DTC or TIEA comes into force, France does not
need to take additional measures to make it effective.
Phase 2 Rating
completed.
C.2. Exchange of information mechanisms with all relevant partners
The jurisdictions network of information exchange mechanisms should cover
all relevant partners.
243. France has a broad network of tax treaties and TIEAs covering all
its significant partners. In particular, it has treaties with all its neighbours as
well as with all members of the European Union.
244. Frances network is in fact not only one of the largest but also one of
the oldest in the world. Today, the priority of the French authorities is to mod-
ernise the network by renegotiating agreements with Frances most important
partners (protocols in force with the United States, United Kingdom, Japan,
Germany, Switzerland and Luxembourg).
245. The treaty with Belgium is not up to the standard in terms of the
exchange of banking information, as the protocol to that treaty has not been
ratified by Belgium.
246. France has also renegotiated tax treaties that did not contain an EOI
article (Qatar in 2008, Bahrain in 2009, and Saudi Arabia in 2010). Today
only the negotiations with Oman are still ongoing.
247. As to those other treaties where EOI provisions are not up to the
standard but where there has been no exchange of information in recent
years, France is renegotiating their provisions as the occasion arises, i.e. when
negotiations are necessary on other articles of the treaty. Examples are the
treaties with Malawi and Zambia, concerning the geographic coverage of the
agreements, or the one with Bolivia concerning persons covered by the treaty.
248. Since 2009 France has also sought to expand its network and it has
offered to open negotiations with the jurisdictions that, according to the
OECD Secretary-Generals progress report of 2 April 2009 on implementa-
tion of the internationally agreed tax standard, were not applying the inter-
national standard on transparency and exchange of information. All but one
have responded to this offer and begun discussions.
249. In total, France signed 20 protocols, tax treaties or TIEAs in 2009, 16
in 2010 and two at the beginning of 2011.
250. In no case has a member of the Global Forum reported that, after
contacting France in order to negotiate an agreement or a protocol, it received
no response or a negative response. The French authorities confirm that they
are willing to sign an EOI agreement with any jurisdiction that so requests,
even if its economic ties with that jurisdiction are negligible.
Phase 2 Rating
completed.
C.3. Confidentiality
The jurisdictions mechanisms for exchange of information should have adequate
provisions to ensure the confidentiality of information received.
Information received: disclosure, use and safeguards (ToR C.3.1)
251. Governments would not engage in information exchange without the
assurance that the information provided would only be used for the purposes
permitted under the exchange mechanism and that its confidentiality would
be preserved. Information exchange instruments must therefore contain
confidentiality provisions that spell out specifically to whom the information
can be disclosed and the purposes for which the information can be used.
In addition to the protection afforded by the confidentiality provisions of
information exchange instruments, tax jurisdictions generally impose strict
confidentiality requirements on information collected for tax purposes.
a) Provisions of EOI mechanisms
252. The provisions governing confidentiality are based on article 26(2) of
the OECD Model Tax Convention (in its successive versions, depending on
the date of signature of the treaty in question) or on article 8 of the Model
TIEA, according to which any information received by a Contracting State
shall be treated as secret in the same manner as information obtained under
the domestic laws of that State.
253. The majority of French treaties as well as Directive 77/799, the
OECD/COE convention and all the TIEAs provide that the information
obtained in the course of a request for assistance shall be accessible only to
persons directly concerned with the assessment of the tax or the administra-
tive control of that assessment. This term embraces taxpayers, their repre-
sentatives, the tax administration, and judges of the tax courts. While an
instrument may allow information to be disclosed to the taxpayer, it does not
oblige the competent authority to do this. In fact, there may be cases where
the information is given in confidence to the requesting party and the source
of the information may have a legitimate interest in preventing its disclosure
to the taxpayer (see chapter B.2 above).
254. Other bilateral treaties
95
make information available to the persons
responsible for tax assessment or administration. The information exchange
will then be kept confidential vis--vis the taxpayers concerned.
255. The manual on administrative assistance in direct tax matters pro-
vides that, in the case of information received by France through adminis-
trative assistance and used to correct the tax situation of a taxpayer, he/she
may submit a written request for communication of the documents received
(except where the treaty used contains a restrictive clause preventing such a
communication to the taxpayer). Where France is the requested party, nothing
in the law requires the authorities to inform the taxpayer of the existence of
an EOI request. In practice, the authorities never inform the taxpayer that he/
she is the subject of a request for information from an EOI partner.
256. All the TIEAs and some of the treaties signed by France provide for
the possibility of communicating the information exchanged for other than
tax purposes (for example, the protocol to the treaty with Bahrain, which is
not in force)
96
in accordance with article 8 of the Model TIEA and commen-
95. Primarily the older treaties, such as those with Benin, Brazil, Bulgaria, Burkina
Faso, Cameroon, Estonia, Jamaica, Lithuania, Niger, the Czech Republic, Senegal.
The conventions with Malawi and Zambia refer to interested persons.
96. On the other hand, none of the French TIEAs provides for agreeing to disclosure
of the information exchanged to the authority of a third jurisdiction, contrary
to the model agreement. This discrepancy does not affect compliance with the
tary 12.3 to the Model Tax Convention.
97
Thus, the TIEAs all provide that
information provided to the competent authority of the requesting party may
not be used for any purpose other than for the purposes stated in Article 1
without the prior express written consent of the requesting party. The trea-
ties use the formulation of commentary 12.3 to the Model Tax Convention:
Notwithstanding the foregoing, information received by a Contracting State
may be used for other purposes when such information may be used for such
other purposes under the laws of both States and the competent authority of
the supplying State authorises such use.
98
b) French law
257. Officers of the tax administration are subject to professional secrecy
pursuant to articles L103 of the LPF and 226-13 and 226-14 of the Penal Code.
258. The obligation of professional secrecy in tax matters applies to all
persons who, in the course of their duties, are involved in the assessment,
supervision, collection or litigation of taxes, duties, levies or royalties.
Secrecy extends to all information collected during such operations (LPF
article 103). This rule allows for exceptions, primarily for the benefit of other
French administrations and the judicial authorities, as well as the foreign
competent authorities, on the basis of an EOI agreement (articles L113 ff).
259. The regulatory part of the LPF specifies that the information com-
municated through exceptions to tax secrecy must be the object of a prior
request, with the exception of EOI. The information supplied is limited to the
elements necessary to fulfil the missions for which it has been granted (LPF
article R113.1).
260. Article 226-13 of the Penal Code punishes the disclosure of informa-
tion covered by professional secrecy, including tax information, by one year
of imprisonment and a fine up to EUR 15 000.
standard, as the competent authority always has the possibility of refusing to
authorise disclosure of the information.
97. Contracting States may wish to allow the sharing of tax information by tax authori-
ties with other law enforcement agencies and judicial authorities on certain high
priority matters (e.g. to combat money laundering, corruption, terrorism financ-
ing). Contracting States wishing to broaden the purposes for which they may use
information exchanged under this Article may do so by adding a specific provision.
98. Directive 77/799 provides moreover that a member state may disclose tax infor-
mation received from another member state during judicial proceedings if the
state supplying the information has raised no objection
c) In practice
261. In practice, all communications with partners are treated as confiden-
tial by the French competent authority and the persons involved in collecting
and exchanging information are fully aware of their obligations.
262. The competent authority has a computer programme for International
Administrative Assistance that it uses for handling incoming and outgoing
EOI requests relating to direct taxes, VAT, inheritance tax and collection
of taxes. Officials receive access rights and user rights to this programme.
Depending on their level of authorisation, users may access all the informa-
tion or only a part thereof, as well as make changes to files.
263. In order to enforce secrecy provisions, the tax administration has pre-
pared a charter for using information and communication technologies. This
charter guarantees the security and proper functioning of the information
system by establishing ethical principles for the use of computerised tools.
Lastly, intra-Community exchanges are done via the common communication
network (CCN Mail, with securitised mailboxes in all Member States).
264. No member of the Global Forum has raised doubts on the ability of
the French authorities to respect the confidentiality duty nor has any case
been reported where this duty was violated. The French authorities confirmed
that they have never encountered a confidentiality problem in practice.
Other information exchanged (ToR C.3.2)
265. The confidentiality provisions contained in the applicable agree-
ments and in French legislation do not make any distinction as to whether the
information is received in response to a request or is part of the request itself.
These provisions apply equally to requests, to the attached documents and to
all communications between the jurisdictions involved in the exchange.
Phase 2 Rating
completed.
C.4. Rights and safeguards of taxpayers and third parties
The exchange of information mechanisms should respect the rights and
safeguards of taxpayers and third parties.
266. The international standard allows requested parties not to supply
information in response to a request in certain identified situations where an
issue of trade, business or other legitimate secret may arise.
Exceptions to requirement to provide information (ToR C.4.1)
267. All French tax treaties ensure that the parties are not obliged to
provide information which would disclose any trade, business, industrial,
commercial or professional secret or information the disclosure of which
would be contrary to public policy (ordre public),
99
in a manner consist-
ent with Article 26(3)(c) of the Model Tax Convention. The TIEAs signed
by France contain similar provisions (based on those of the Model TIEA),
with sometimes an express reference to the professional secrecy duties of
lawyers (legal privilege),
100
in which case the notion of legal privilege refers
to Article 7(3) of the TIEA that allows to decline a request if it would reveal
confidential communications between a client and an attorney.
268. In addition, the LPF prohibits the French administration from provid-
ing information which would disclose any business, industrial or professional
secret or information the disclosure of which would be contrary to public
policy (article R114A-2).
269. In practice, professional secrecy has never posed a problem, as all
information relevant to EOI requests are obtained from taxpayers themselves.
270. France has invoked this clause only once in the course of the last
three years, when it refused to respond to a request for information on the
grounds of protecting the ordre public, in conformity with the standard.
99. Some treaties with African jurisdictions, dating from the 1960s and 1970s, replace
the term ordre public with a phrase indicating that the assistance may be denied
when the requested state considers that it might pose a danger to its sovereignty
or its security, or would jeopardise its general interests (Benin, Burkina Faso,
Cameroon, Malawi, Mauritania, Niger, Senegal, Zambia)
100. Andorra, Bahamas, Bermuda, British Virgin Islands, Cayman Islands, Turks
and Caicos, Gibraltar, Guernsey, Isle of Man, Jersey, Liechtenstein, San Marino,
Uruguay and Vanuatu. The TIEAs with Antigua and Barbuda, Grenada, the
Cook Islands, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines
contain a definition of legal privilege (consistent with the interpretation of para-
graphs 2 and 4 of article 7, discussed in commentary 85 to the model agreement).
Phase 2 Rating
completed.
C.5. Timeliness of responses to requests for information
The jurisdiction should provide information under its network of agreements
in a timely manner.
Responses within 90 days (ToR C.5.1)
271. In order for exchange of information to be effective it needs to be
provided in a timeframe that allows tax authorities to apply the information to
the relevant cases. If a response is provided but only after a significant lapse
of time, the information may no longer be of use to the requesting authorities.
This is particularly important in the context of international co-operation as
cases in this area must be of sufficient importance to warrant making a request.
272. Thus, jurisdictions should be able to respond to requests within 90
days of receipt by providing the information requested or offering an update
on the status of the request. There is nothing in French law that would prevent
the French authorities from responding to requests within 90 days of receipt,
or at least providing a progress report concerning the procedure.
273. In practice, the French authorities respond by this deadline only
sometimes; more significantly, they often fail to advise their partners of the
status of their requests. Many partners indicated that, generally speaking,
France does not advise the requesting jurisdiction of the status of the proce-
dure when the response cannot be provided unless the requesting jurisdiction
so requests expressly through a follow-up message. The French authorities
agree that this is a shortcoming in their co-operation system and they already
have plans to remedy it by instituting a computerised tracking programme
(see below).
101
101. On the other hand, France systematically sends an acknowledgment within 3 to
7 days after receipt of the request at the CF3 office; the absence of acknowledg-
ment indicates that the request has not been received by the French authorities.
274. The French authorities report that their response time to requests
averages 145 days (in 2009; 159 days in 2008). This response time varies
greatly, depending on the complexity of the request (the number of persons
involved, the number of questions) and on whether the information is already
in the tax administrations databases or has to be obtained through the
droit de communication. Frances customary partners have confirmed that
response times vary with the complexity of their requests. Only one partner
reported closing a case because of lack of response from the French authori-
ties within 18 months of the request.
year
Information
provided within
90 days
Information
provided between
91 and 180 days
Information
provided between
181 and 365 days
Information
provided in more
than 1 year
2007 49.22% 32.25% 12.88% 5.65%
2008 41.85% 29.35% 14.40% 14.40%
2009 42.02% 37.08% 14.60% 6.30%
275. In the context of cross-border exchanges, France participates in
yearly meetings to consider and assess practices that should be mutually
adopted and pursued with each of its partners. For instance, the CF3 office
meets annually with its Spanish counterpart to consider cases pending and
to discuss those that present particular difficulties. An annual assessment is
prepared in order to identify areas for improvement.
276. These meetings appear to be useful, as Frances major EOI partners
are those that seem the most satisfied with response times.
277. Representatives of several agencies interviewed during the on-site
visit showed a real interest in mutual administrative assistance and they
seem to take particular care in handling any information request submitted
by a partner. On the other hand, all felt that Frances response times were
reasonable, and were in line with the average response times of their principal
partners. It is apparent, however, that some organisational processes could be
shortened.
Organisational process and resources (ToR C.5.2)
278. Nearly all tax treaties and TIEAs designate the budget minister or
his authorised representative as the competent authority.
102
The authorised
representative for incoming requests
103
is the Office of International Affairs
(CF3). As a general rule, CF3 receives requests for information whether
they are based on a tax treaty, a TIEA, or a multilateral instrument. Some
requests, however, are addressed to tax attachs posted abroad or in certain
border regions, on the basis of delegation.
279. The CF3 office has eight people in charge of international admin-
istrative assistance (four persons for direct taxes and four for VAT matters).
This office is part of the Department of Fiscal Control within the Tax Policy
Directorate of the Ministry of Budget, Public Accounts and Reform of the
State. Its position within the administration gives it hierarchical authority
over all units potentially involved in gathering the information requested.
280. France has created six tax attach posts in the capitals of its major
partners as well as in North America, so that problems can be identified and
resolved more promptly. Reporting to the CF3, they handle urgent or com-
plex requests from the 12 jurisdictions to which they are assigned: Germany
(Berlin); Belgium, Luxembourg and Netherlands (Brussels); United Kingdom
and Ireland (London); Spain and Portugal (Madrid); Italy (Rome); and United
States, Canada and Mexico (Washington). Since 2000, the tax attachs have
been sending directly to the directorates concerned any spontaneous informa-
tion and EOI requests in direct tax matters received from the respective foreign
tax authorities. Once the request has been processed, the information gath-
ered at the foreign authoritys request is transmitted directly by the requested
directorate to the tax attach for onward transmission to the foreign competent
authority. Special attention is paid to complex issues such as tax fraud.
281. France has cross-border agreements in place, with Germany (2003),
Spain (2004), and Belgium (2006). These agreements delegate authority to
certain border directorates, allowing them to exchange information directly.
This encourages informal contacts and better understanding among partners.
France reports that these agreements have proven very useful, and that the
number of requests handled in this manner has been growing steadily. The
campaign against cross-border fraud, including cases involving small and
very small entities, has thus been intensified.
102. Some of the older treaties (e.g. with Benin, Burkina Faso, Cameroon, Malawi,
Niger, Senegal and Zambia) provide that information should be exchanged directly
between tax authorities.
103. Responsibility for outgoing requests is decentralised, and various offices may
send requests for information to Frances foreign partners.
282. To prevent confusion arising from the great number of potential inter-
locutors, the French authorities send to all their partners every year a list of
the competent authorities, with contact information. This list is also published
via the EU and OECD intranets.
Resources
283. In total, there are around 50 persons responsible for the exchange of
information in France (covering both incoming and outgoing requests). These
persons, as well as any officers who may be required to gather information
to respond to a foreign request, receive regular training in international
administrative assistance and are guided by a Manual of Administrative
Assistance in Direct Taxation Matters (this in fact focuses primarily on out-
going requests, which are handled in a decentralised manner).
104
English and
Spanish courses are also offered and one partner was very pleased to receive
the requested information together with an English translation.
284. More generally, for some years now the National School for Public
Finances has provided a training session in international taxation (tax treaties,
administrative assistance, etc.) for every senior officer. The intent is to make
all officers, whatever their position, aware of international tax issues and
the importance of administrative assistance. In a typical year some 500 new
agents pass through the National Taxation School, where they are familiarised
with information exchange before they take up their position.
Organisational process
285. The typical routing of a request is as follows: the competent authority
(CF3) receives the EOI request, confirms its admissibility (legal basis cited,
signature of the requesting authority) and acknowledges receipt.
286. If there is any ambiguity in the request, or if details essential to
the search are missing (e.g. if the person concerned is not identified clearly
enough to be located within the available databases), the competent author-
ity will contact its requesting counterpart by post or e-mail, if the electronic
address is given in the request, as noted by several partners. France is in fact
a member of an EU working group that is creating a single request form to
facilitate EOI in direct taxation matters (as already exists in VAT matters).
287. Within one week the CF3 decides whether to handle the request
directly or to refer it to a management or control unit. Simple requests, such
104. The manual dates from 2007. It deals essentially with outgoing requests. It alerts
agents to the need to respond promptly and carefully to any EOI request.
as those involving a tax declaration or confirmation of residence, can be pro-
cessed within the week.
288. All requests are recorded in a dedicated computerised application
(AAI, Assistance Administrative Internationale) that can track incoming
and outgoing requests (statistical data, unit responsible for collecting infor-
mation, request processing times, reminders, etc.).
289. Requests that cannot be handled directly by the central authority
are sent to the local directorates, which transfer the request to the competent
operational unit. CF3 allows the unit 60 days to respond. All responses are
provided in a standard electronic format, and documentary attachments are
scanned. The representative of one control and research brigade said that, as
a general rule, the processing time for a request in her brigade varied between
three days and three months, depending on the complexity of the request and
its clarity, with some partners explaining their requests better than others.
290. Responses are checked by the head of the local directorate before being
sent on to the CF3 office, which again verifies the responses. The head or the
assistant head of the team verifies that the elements necessary to the response
have been properly transmitted and that the appropriate searches have been
conducted. If there are shortfalls, supplementary searches are requested; oth-
erwise, the responses are sent the next day to the requesting authority. Partial
responses may also be sent, mainly in the case of European partners.
291. The computer application mentions the dates of the draft response
from the decentralised authorities to the central administration. For the time
being, reminders are not automated, but the French authorities are planning
to integrate this functionality in the coming months.
Restrictions on the exchange of information (ToR C.5.3)
292. There is no provision in Frances legislation or in its EOI instru-
ments that would impose conditions on the exchange of information beyond
those contemplated in article 26 of the OECD Model Tax Convention or the
Model TIEA. Nor does it appear that France has created any restriction on the
exchange of information in practice.
The assessment team is not in a position to evaluate whether this
element is in place, as it involves issues of practice that are dealt with in
the Phase 2 review.
Phase 2 Rating
completed.
Factors underlying
recommendations
Recommendations
France rarely advises requesting
jurisdictions of the status of their
requests when the competent
authority is not in a position to
respond within 90 days.
The competent central authority does
not systematically send reminders
to the tax units handling an EOI
request when they do not submit their
responses within 60 days.
France should promptly implement a
system for advising requesting juris-
dictions of the status of their requests
when the competent authority is not in
a position to respond within 90 days.
France should promptly implement
its plan to send automatic reminders
to the units responsible for gathering
information in order to optimise
response times.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 83
Summary of Determinations and Factors
Underlying Recommendations
Determinations Factors underlying
recommendations
Recommendations
Jurisdictions should ensure that ownership and identity information for all relevant entities
and arrangements is available to their competent authorities. (ToR A.1)
Phase 1: The element
is in place
Phase 2: The rating
will be finalised as
soon as a representa-
tive subset of Phase 2
reviews is completed.
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities
and arrangements. (ToR A.2.)
is in place
Phase 2: The rating
Banking information should be available for all account-holders (ToR A.3.)
is in place
Phase 2: The rating
84 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS
recommendations
Recommendations
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Phase 1
determination: The
element is in place.
Phase 2 rating: To be
finalised as soon as a
representative subset
of Phase 2 reviews is
completed.
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information.
(ToR B.2)
Phase 1
determination: The
completed.
Exchange of information mechanisms should allow for effective exchange of information.
(ToR C.1)
Phase 1
determination: The
completed.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 85
recommendations
Recommendations
The jurisdictions network of information exchange mechanisms should cover all relevant
partners. (ToR C.2)
Phase 1
determination: The
completed.
The jurisdictions mechanisms for exchange of information should have adequate provisions
to ensure the confidentiality of information received. (ToR C.3)
Phase 1
determination: The
completed.
The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties. (ToR C.4)
Phase 1
determination: The
fnalised as soon as a
completed.
86 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS
recommendations
Recommendations
The jurisdiction should provide information under its network of agreements in a timely
manner. (ToR C.5)
Phase 1
determination: The
assessment team is
not in a position to
evaluate whether this
element is in place, as
it involves issues of
practice that are dealt
with in the Phase 2
review.
completed.
France rarely advises
requesting jurisdictions of
the status of their requests
when the competent author-
ity is not in a position to
respond within 90 days.
The competent central
authority does not system-
atically send reminders to
the tax units handling an
EOI request when they do
not submit their responses
within 60 days.
France should promptly
implement a system for
advising requesting jurisdic-
tions of the status of their
requests when the com-
petent authority is not in a
position to respond within
90 days.
France should promptly
implement its plan to send
automatic reminders to the
units responsible for gather-
ing information in order to
optimize response times.
ANNEXES 87
Annex 1: The Jurisdictions Response to the Peer Review*
France would like to thank the assessment team for the tremendous work
it has performed, as well as members of the Peer Review Group and other
exchange of information partners for their numerous and valuable contribu-
tions to the review.
France has taken note of the positive findings of the review report.
France, which received recommendations to further speed of transmit-
ting information to its partners, has already taken the necessary steps to that
effect.
* This Annex presents the Jurisdictions response to the review report and shall
not be deemed to represent the Global Forums views.
88 ANNEXES
Annex 2: French Exchange-of-Information Mechanisms
Multilateral agreements
France is a party to the:
EU Council Directive 77/799/EEC of 19 December 1977 concerning
mutual assistance by the competent authorities of the Member States
in the field of direct taxation and taxation of insurance premiums.
The current EU members, covered by this Council Directive, are:
Austria, Belgium, Bulgaria, Cyprus,
105
Czech Republic, Denmark,
Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy,
Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal,
Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.
EU Council Directive of 15 February 2011 concerning administrative
cooperation in tax matters will strengthen this directive. The deadline
for transposition of the directive into the national laws of the member
states is 1 January 2013.
EU Council Directive 2003/48/EC of 3 June 2003 on taxation of sav-
ings income in the form of interest payments. This Directive aims to
ensure that savings income in the form of interest payments generated
in an EU member state in favour of individuals or residual entities
105. Footnote by Turkey: The information in this document with refer-
ence to Cyprus relates to the southern part of the Island. There is no single
authority representing both Turkish and Greek Cypriot people on the Island.
Turkey recognizes the Turkish Republic of Northern Cyprus (TRNC). Until
a lasting and equitable solution is found within the context of United Nations,
Turkey shall preserve its position concerning the Cyprus issue.
Footnote by all the European Union member states of the OECD and the
European Commission: The Republic of Cyprus is recognized by all members
of the United Nations with the exception of Turkey. The information in this
document relates to the area under the effective control of the Government of
the Republic of Cyprus.
ANNEXES 89
being resident of another EU member state are effectively taxed in
accordance with the fiscal laws of their state of residence. It also aims
to ensure exchange of information between member states.
Council of Europe and OECD Convention on Mutual Administrative
Assistance in Tax Matters, which is currently in force with respect
to 14 jurisdictions: Azerbaijan, Belgium, Denmark, Finland, France,
Iceland, Italy, the Kingdom of the Netherlands, Norway, Poland,
Sweden, the Ukraine, the United Kingdom and the United States.
106

France signed its protocol, which is not yet in force.
Bilateral agreements
List of information exchange agreements (TIEA) and tax treaties (DTC)
signed by France as of 28 February 2011. For jurisdictions with which France
has several agreements, a reference to the multilateral agreement is placed
in parentheses (Directive 77/799 or OECD/COE treaty). When the date of
signature is followed by a date in parentheses, the latter refers to signature of
the agreement, while the former refers to signature of the protocol.
Jurisdiction Type of EOI
arrangement
Date of
signature
Date of entry
into force
1. Andorra TIEA 22/09/2009 22/12/2010
2. Anguilla TIEA 30/12/2010 Not ratified
3. Antigua and Barbuda TIEA 26/03/2010 28/12/2010
4. Bahamas TIEA 07/12/2009 13/09/2010
5. Belize TIEA 22/11/2010 Not ratified
6. Bermuda TIEA 12/10/2009 28/10/2010
7. British Virgin Islands TIEA 17/06/2009 18/11/2010
8. Brunei TIEA 30/12/2010 Not ratified
9. Cayman Islands TIEA 05/10/2009 13/10/2010
10. Cook Islands TIEA 15/09/2010 Not ratified
11. Costa Rica TIEA 16/12/2010 Not ratified
12. Curacao TIEA 10/09/2010 Not ratified
13. Dominica TIEA 24/12/2010 Not ratified
14. Gibraltar TIEA 24/09/2009 9/12/2010
106. Canada, Germany and Spain have signed the Convention and are awaiting
ratifcation.
90 ANNEXES
arrangement
Date of
signature
Date of entry
into force
15. Grenada TIEA 31/03/2010 Not ratified by
the partner
16. Guernsey TIEA 24/03/2009 4/10/2010
17. Isle of Man TIEA 26/03/2009 4/10/2010
18. Jersey TIEA 23/03/2009 11/10/2010
19. Liberia TIEA 06/01/2011 Not ratified
20. Liechtenstein TIEA 22/09/2009 19/08/2010
21. Saint Lucia TIEA 01/04/2010 20/01/2011
22. Saint Maarten TIEA 10/09/2010 Not ratified
23. Saint Vincent and the
Grenadines
TIEA 13/04/2010 Not ratified by
the partner
24. San Marino TIEA 22/09/2009 2/09/2010
25. St Kitts and Nevis TIEA 01/04/2010 16/12/2010
26. Turks and Caicos TIEA 12/10/2009 Not ratified by
the partner
27. Uruguay TIEA 28/01/2010 31/12/2010
28. Vanuatu TIEA 31/12/2009 07/01/2011
29. Albania DTC 24/12/2002 01/10/2005
30. Algeria DTC 17/10/1999 20/12/2002
31. Argentina DTC 15/08/2001
(1979)
01/10/2007
32. Armenia DTC 03/02/2004
(1997)
07/12/2006
33. Australia DTC 20/06/2006 01/06/2009
34. Austria DTC (77/799) 26/03/1993 06/12/1994
35. Azerbaijan DTC (COE/OECD) 20/12/2001 01/10/2005
36. Bahrain DTC 07/05/2009 1/02/2011

37. Bangladesh DTC 09/03/1987 01/09/1988
38. Belgium DTC (77/799) 08/02/1999
(1964)
27/04/2000
DTC (77/799) 07/07/2009 Not ratified by
the partner
39. Benin DTC 27/02/1975 08/11/1977
40. Bolivia DTC 15/12/1994 01/11/1996
ANNEXES 91
arrangement
Date of
signature
Date of entry
into force
41. Bosnia Herzegovina DTC 28/03/1974
(ex-Yugoslavia)
01/08/1975
42. Botswana DTC 15/04/1999 14/06/2003
43. Brazil DTC 10/09/1971 10/05/1972
44. Bulgaria DTC (77/799) 14/03/1987 01/05/1988
45. Burkina Faso DTC 03/06/1971
(1965)
01/10/1974
46. Cameroon DTC 28/10/1999
(1976)
01/01/2003
47. Canada DTC 30/11/1995
(1975)
01/09/1998
48. Chile DTC 07/06/2004 10/07/2006
49. China DTC 30/05/1984 21/02/1985
50. Cyprus
107
DTC 18/12/1981 01/04/1983
51. Congo DTC 27/11/1987 01/09/1989
52. Cte dIvoire DTC 19/10/1993
(1966)
01/05/1995
53. Croatia DTC 19/06/2003 01/09/2005
54. Czech Republic DTC 28/04/2003 01/07/2005
55. Denmark Directive 77/799
56. Ecuador DTC 16/03/1989 25/03/1992
57. Egypt DTC 01/05/1999
(1980)
01/06/2004
58. Estonia DTC (77/799) 28/10/1997 01/05/2001
59. Ethiopia DTC 15/06/2006 17/07/2008
60. Finland DTC (77/799) 11/09/1970 01/03/1972
61. FYROM DTC 10/02/1999 01/05/2004
62. Gabon DTC 20/09/1995 01/03/2008
63. Germany DTC (77/799) 20/12/2001
(1959)
01/06/2003
64. Georgia DTC 07/03/2007
(1985)
01/06/2010
65. Ghana DTC 05/04/1993 01/04/1997
107. See footnote 105.
92 ANNEXES
arrangement
Date of
signature
Date of entry
into force
66. Greece DTC (77/799) 21/08/1963 31/12/1964
67. Guinea DTC 15/02/1999 01/10/2004
68. Hungary DTC (77/799) 28/04/1980 01/12/1981
69. Hong Kong, China DTC 21/10/2010 Not ratified
70. Iceland DTC 29/08/1990 01/06/1992
71. India DTC 29/09/1992 01/08/1994
72. Indonesia DTC 14/09/1979 13/03/1981
73. Iran DTC 07/11/1973 10/04/1975
74. Ireland DTC (77/799) 21/03/1968 15/06/1971
75. Israel DTC 31/07/1995 18/07/1996
76. Italia DTC (77/799,
OECD-COE)
05/10/1989 01/05/1992
77. Jamaica DTC 09/08/1995 21/05/1998
78. Japan DTC 11/01/2007
(1995)
01/12/2007
79. Jordan DTC 28/05/1984 01/04/1985
80. Kazakhstan DTC 03/02/1998 01/07/2000
81. Kenya DTC 04/12/2007 01/11/2010
82. Kosovo DTC 28/03/1974
(ex-Yugoslavia)
01/08/1975
83. Kuwait DTC 27/01/1994
(1982)
01/03/1995
84. Latvia DTC (77/799) 14/04/1997 01/05/2001
85. Lebanon DTC 24/07/1962 02/01/1964
86. Libyan Arab Jamahiriya DTC 22/12/2005 01/07/2008
87. Lithuania DTC (77/799) 07/07/1997 01/05/2001
88. Luxembourg DTC (77/799) 24/11/2006
(1958)
27/12/2007
Protocol (77/799) 03/06/2009 29/10/2010
89. Madagascar DTC 22/07/1983 01/10/1984
90. Malawi DTC 14/12/1950 (ex
Franco-British
convention)
31/07/1951
91. Malaysia DTC 12/11/2009
(1975)
1/12/2010
ANNEXES 93
arrangement
Date of
signature
Date of entry
into force
92. Mali DTC 22/09/1972 01/01/1975
93. Malta DTC (77/799) 28/08/2008
(1977)
01/06/2010
94. Mauritania DTC 15/11/1967 01/03/1969
95. Mauritius DTC 11/12/1980 17/09/1982
96. Mexico DTC 07/11/1991 31/12/1992
97. Monaco DTC 26/05/2003
(1969)
01/08/2005
98. Mongolia DTC 18/04/1996 01/12/1998
99. Montenegro DTC 28/03/1974
(ex-Yugoslavia)
01/08/1975
100. Morocco DTC 18/08/1989
(1970)
01/12/1990
101. Namibia DTC 29/05/1996 01/05/1999
102. Netherlands DTC (77/799,
OECD-COE)
16/03/1973 27/02/1974
103. New Zealand DTC 30/11/1979 19/03/1981
104. Niger DTC 01/06/1965 01/07/1966
105. Nigeria DTC 27/02/1990 02/05/1991
106. Norway DTC 16/09/1999
(1980)
01/12/2002
107. Pakistan DTC 15/06/1994 01/09/1996
108. Philippines DTC 09/01/1976 24/08/1978
109. Poland DTC (77/799,
OECD-COE)
20/06/1975 12/09/1976
110. Portugal DTC (77/799) 14/01/1971 18/11/1972
111. Qatar DTC 14/01/2008 23/04/2009
112. Central African Republic DTC 13/12/1969 01/03/1971
113. Republic of Korea DTC 19/06/1979 01/02/1981
114. Romania DTC 27/09/1974 27/09/1975
115. Russia DTC 26/11/1996 06/02/1999
116. Saudi Arabia DTC 18/02/2011 Not ratified
117. Senegal DTC 10/01/1991
(29/03/1974,
16/07/1984)
01/02/1993
94 ANNEXES
arrangement
Date of
signature
Date of entry
into force
118. Serbia DTC 28/03/1974
(ex-Yugoslavia)
01/08/1975
119. Singapore DTC 13/11/2009
(1974)
1/01/2011
120. Slovakia DTC (77/799) 01/06/1973
(ex-Yugoslavia)
25/01/1975
121. Slovenia DTC (77/799) 07/04/2004 30/03/2007
122. South Africa DTC 08/11/1993 01/11/1995
123. Spain DTC (77/799) 10/10/1995 01/07/1997
124. Sri Lanka DTC 17/09/1981 18/11/1982
125. Sweden DTC (77/799, CE/
OCDE)
27/11/1990 01/04/1992
126. Switzerland DTC 22/07/1997
(1969)
01/08/1998
Protocol 27/08/2009 4/11/2010
127. Syria DTC 17/07/1998 01/05/2009
128. Thailand DTC 27/12/1974 29/08/1975
129. Togo DTC 24/11/1971 01/04/1975
130. Trinidad and Tobago DTC 05/08/1987 01/04/1989
131. Tunisia DTC 28/05/1973 01/04/1975
132. Turkey DTC 18/02/1987 01/07/1989
133. Ukraine DTC 31/01/1997 01/11/1999
134. United Arab Emirates DTC 06/12/1993
(1989)
01/06/1995
135. United Kingdom DTC (77/799,
OECD-COE)
19/06/2008 18/12/2009
136. United States of America DTC 13/01/2009
(1994)
23/12/2009
137. Uzbekistan DTC 22/04/1996 01/10/2003
138. Venezuela DTC 07/05/1992 15/10/1993
139. Vietnam DTC 10/02/1993 01/07/1994
140. Zambia DTC 14/12/1950 (ex
Franco-British
convention)
31/07/1951
141. Zimbabwe DTC 15/12/1993 05/12/1996
ANNEXES 95
Annex 3: List of Laws, Regulations
and Other Relevant Material
Code gnral des impts (CGI) [Tax Code]
Livre des procdures fiscales (LPF) [Tax Procedures Code]
Code civil [Civil code]
Code de commerce [Commercial code]
Code montaire et financier (CMF) [Monetary and Financial Code]
Loi du 19 fvrier 2007 instituant la fiducie [Law of 19 February 2007
establishing fiducies]
Code pnale et Code de procdure pnale [Penal code and Code of
criminal procedure]
All French laws are publicly available at the Legifrance web site: www.
legifrance.gouv.fr. Some codes are also available in English, although the
translation may not be up to date with recent amendments (http://195.83.177.9/
code/index.phtml?lang=uk).
96 ANNEXES
Annex 4: Persons Interviewed during the On-Site Visit
Ministre de lconomie, des finances et de lindustrie ; Direction de
la lgislation fiscale [Ministry of Economy, Finances and Industry;
Tax Policy Directorate]: Sous-direction des affaires internationales et
europennes (E): responsible for the negotiation of tax treaties and of
protocols to those treaties; Bureau en charges des affaires multilat-
rales et europennes et des comparaisons internationales (E2) : office
responsible for relations with the Global Forum and for negotiating
information exchange agreements
Ministre du Budget, des Comptes publics, de la Fonction publique et
de la Rforme de ltat; Direction Gnrale des Finances Publiques
(DGFIP) [Ministry of Budget, Public Accounts, Civil Service and
Reform of the State, General Directorate of Public Finances]:
Bureau des Affaires internationales de la sous-direction du contrle
fiscal (CF3) [international affairs office of the fiscal control division]:
competent central authority for EOI
Brigade de contrle et de recherche (BCR): its task is to seek infor-
mation and indicators for strengthening the tax base and improving
tax control. It also programmes and performs crosschecking opera-
tions, nationally or locally.
Direction nationale des Grandes Entreprises (DGE) this is the
centre responsible for handling tax declarations and tax payments
by corporations with annual turnover of EUR 400 million or more,
as well as subsidiaries or parent corporations where the controlling
interest exceeds 50%.
Direction des Vrifications Nationales et Internationales (DVNI):
responsible for supervising 1300 large corporations and 1000
national and international business groups.
Attach fiscal [tax attach] in London (responsible for the United
Kingdom and Ireland).
ANNEXES 97
Ministre de lconomie, des Finances et de lIndustrie [Ministry
of Economy, Finance and Industry]; Direction Gnrale du Trsor
[General Directorate of the Treasury]: responsible for developing
and monitoring the fight against money laundering, and for relations
with FATF.
Cellule de renseignement financier [Financial Intelligence Unit],
Tracfin [acronym for Processing of information and action against
clandestine financial circuits].
Centre de formalits des entreprises [Business procedures centre] of
the dpartement of Hauts de Seine (92) Dpartement des Finances
publiques.
Conservation des hypothques de Paris [Mortgage registry office
of Paris]: taxpayers are required to register all official deeds that are
subject to publication (dealing with sales of real estate and any mov-
able property) and to pay the corresponding duties and fees at this
office. This office also has complete information on the legal status
of properties, including the identity of their owners.

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PEER REVIEW REPORT COMBINED PHASE 1 AND PHASE 2 REPORT FRANCE OECD 2011

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