TLDR: Tax residents in France linked to countries with a privileged tax regime or non-cooperative jurisdictions must declare foreign accounts, provide accounting documentation, and justify the economic substance of transactions. A withholding tax of 75% applies to residents of non-cooperative states, unless proven otherwise.
Declaration obligations for foreign accounts
Individuals taxed as residents in France must declare, along with their income or results tax return, the details of accounts opened, held, used, or closed abroad. This obligation applies regardless of the amount or nature of the account.
Documentation for entities in privileged tax regime countries
French legal entities must provide all elements proving that the effect of transactions carried out through entities established in countries with a privileged tax regime is primarily non-tax-related. This includes material and quantitative data allowing an objective comparison between tax and non-tax benefits.
They must also produce the balance sheet and income statement of each entity located in a country with a privileged tax regime, in accordance with the rules of the Code général des impôts (CGI) or, failing that, the documents filed with the local tax authority.
Statement of tax credits and withholding taxes
Companies or legal entities must attach to their balance statement a detailed breakdown of tax credits, tax deductions, and withholding taxes offset against corporate tax. This statement must specify, for each item, the amount, the nature of the corresponding income, the applied rate, and the country of origin.
Tax treatment for residents of non-cooperative states
A withholding tax of 75% applies to benefits or gains realised by individuals residing in a non-cooperative state or territory, unless the debtor proves that these transactions have a primary purpose and effect other than their location in such a state. This withholding tax is final and non-refundable.
The increased withholding tax applies without the need to determine the tax residence of the beneficiary, whether it is their tax domicile or registered office.
Document submission procedures
Accounting and tax documents must be submitted in paper form to the competent tax office, simultaneously with the results declaration or the corporate tax balance statement.
Exceptions and limits
Declaration obligations and increased withholding taxes do not apply to states or territories listed in 2° of 2 bis of Article 238-0 A of the CGI, subject to the conditions provided by the regulations.