France: information exchange systems are not working

From the Wall St. Journal:

"France had signed a tax treaty with Switzerland in August 2009. Since then, France has sent 80 requests to Swiss authorities, but received a response for only 16 of these requests, said Pecresse."

That's the French Budget Minister, whom we've just written about. Christian Chavagneux has more:

"In the context of what the G20 has put in place since April 2009, France has signed 36 tax information exchange agreements, of which 22 are in force. French tax authorities can theoretically ask for information from tax havens when there is a question about the activity of a particular taxpayer. It can do this - but does this happen? For the first time, the minister gave out some information: in the first eight months of the year, France sent 230 information requests to 18 countries - and it only got a rate of return of 30 percent. And for those countries which did reply, the information was not necessarily of the quality what had been asked for:

"Elements of a juridical nature (statutes, names of shareholders, business reports) were generally transmitted. However, the transmission of more concrete elements relative to taxpayers (information on bank balances, amounts of remuneration) often seem to have been more difficult, and some states seem to think that co-operation involves confirming information already known by the French authorities, rather than giving new information."

So it seems clear, given the information given by the Minister, that the devide for exchanging information on request, put in place by the Global Forum on Transparency and Exchange of Information is not yet developed. And that backs non-governmental organisations' demands to move towards automatic information of information.

Fascinating insights and information, confirming what we've long, long been saying. But there is more encouraging news:

If tax havens continue to hold back information, the Minister and the Rapporteur indicated, threatened, that they were ready to put recalcitrant jurisdictions on the French official list of tax havens (which today only contains small, rather unimportant territories) - which would mean that any transfer of money to these places would trigger a 50 percent withholding tax.

Way to go, the French Budget Ministry! That makes two excellent pieces of news in one day.

To be added to our fast-growing information exchange page.