France will put on on-line a "public register of trusts", an unprecedented initiative permitting public access to personal information on settlors, beneficiaries and trustees.
France plans to put on-line, beginning 30 June 2016, a "public register of trusts". This is an unprecedented initiative, to make public personal information held by tax authorities, with the announced goal of fighting tax evasion, money-laundering and financing of illicit activities.
The trusts included in this register are those for which a report (in the form of an information return) has been communicated to French tax authorities, pursuant to article 1649 AB of the French tax code. Such reports are required since 20111 for trusts of which at least one of the trustees, settlors or beneficiaries is domiciled for tax purposes in France or which contain assets situated in France (except for financial investments, if none of the trustees, settlors or beneficiaries is domiciled in France).
The reports are filed annually and upon the occurrence of events affecting the trust: its creation; its modification including among other things change of its terms or its mode of operation, change in trustee, change or death of a "beneficiary deemed settlor" or distribution, transmittal, attribution or placement into the trust of assets; or its termination.
The creation of the register and placing it on-line are provided for in decree n° 2016-567 of 10 May 20162 (text attached hereto, with translation), according to which information available to the public will include "the name of the trust and it address" as well as its date of creation (and termination, if applicable) and the identity of the trustees, settlors and beneficiaries (full name, date and place of birth for an individual or name and identifying number for a legal entity).
Apparently the information in the register will be derived from reports filed with French tax authorities, but will not include information about the terms of the trust or its assets or the addresses of settlors or beneficiaries.
It is expected that an administrative order of the Budget Minister will establish a "secure authentification procedure" permitting members of the public (after identifying themselves) to access the register and consult data on the trusts included thereon. Data can be accessed using search criteria including among other things the name of the trust; the identity of the trustee, settlor or beneficiaries, the place the trust is established; or the date it was created. The use of this register will be governed by general conditions set out by the Budget Minister. Pursuant to the decree, persons listed in the public register will not be able to exercise the right to object to their personal information being included therein.3
When this measure was announced, French officials noted that the tax administration currently has information on 16,000 trusts identified as such and that transparency and exchange of information regarding beneficiaries will result "ending use of shell companies for tax evasion, money-laundering and financing illicit activities".4
But French officials also stated that "the difficult point will be to distinguish between the legal use of these measures and concealing something"5. It is true that many perfectly legitimate trusts, set up purely for wealth-management and estate-planning purposes, not involving tax evasion or illicit activities, will be listed in the new register.
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1 Cf. loi de finances rectificative n° 2011-9 of 29 July 2011.
2 Journal Officiel n° 0109 of 11 May 2016, text n° 25. The decree was promulgated under authority set out in article 1649 AB of the French tax code, as modified by article 11 of loi n° 2013-1117 of 6 December 2013 relating to the fight against tax evasion and large-scale economic and financial delinquency.
3 This right of objection is provided for by article 38 of law n° 78-17 of 6 January 1978 relating to information technology, data files and civil liberties.
4 Press release of the Finance and Public Accounts Ministry of 11 May 2016.
5 AFP report of 10 May 2016.
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