August 29, 2013 / 6:29 PM / 4 years ago

France adds Jersey, Bermuda to tax-haven blacklist

* Paves the way for tougher tax treatment

* Philippines removed from list

* Government trying to crack down on tax evasion

PARIS, Aug 29 (Reuters) - France has added Jersey, Bermuda and the British Virgin Islands to its list of uncooperative tax havens, paving the way for tougher financial levies as the EU's No. 2 economy tries to crack down on tax evasion.

French tax law applies some of its harshest rates on investors from countries deemed to be uncooperative.

France added the three countries to the blacklist and removed the Philippines, an entry in France's gazette for official decisions dated Aug. 21 showed. That puts the total number of countries on the list at 10, including Guatemala, Botswana, Brunei and the Marshall Islands.

"Being on the 'blacklist' triggers the application of 75 percent withholding taxes on French source flows to those territories and the strengthening of anti-abuse mechanisms," said Michel Collet, a partner at law firm CMS Francis Lefebvre in Paris.

The entry gave no reason for the move. However, given that France signed exchange-of-information agreements with Jersey, Bermuda and the British Virgin Islands in 2010, it is likely that France was simply unhappy with the response of these territories to requests for tax information, Collet said.

According to data compiled by the French government through to August 2011, Jersey and Bermuda had responded to all French requests for information. The British Virgin Islands had responded to 31 out of 41 requests.

"I am slightly surprised regarding Jersey, as I had heard it was cooperating," said Paris-based lawyer Charles Scheer. "Financial flows with Jersey are likely to be more significant than for Bermuda and the British Virgin Islands."

Governments worldwide are attempting to fight tax evasion and plug holes in their national coffers in the wake of the 2008 financial crisis.

Tax has always been a sensitive issue for France, which has among the highest tax takes in the developed world, but President Francois Hollande has been under pressure to regain the initiative after the embarrassing resignation of his budget minister this year over a secret Swiss bank account. (Reporting by Lionel Laurent and Yann Le Guernigou)

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