Following ratification by the French government, a tax information exchange agreement (TIEA) between Jersey and France came into force in October 2010.
The TIEA was entered into in March 2009 and had already been ratified by the States of Jersey.
The agreement signifies a change of attitude from the French government towards Jersey as it is no longer seen as an uncooperative jurisdiction by the French authorities.
Prior to this agreement all Jersey structures would be charged an annual 3% tax charge on the market value of any French property held as Jersey is outside the EU and there was no 'convention of administrative assistance' between the two.
Following the completion of the agreement Jersey structures will now be able to take advantage of exemption provisions so as not to be liable to this annual charge. The exemption provisions are available as long as the entity complies with reporting requirements in France to disclose the value of the property held and the ideates of investors into the particular structure.
Clearly this provides opportunities for Jersey investment vehicles to enter into the French property market and also opens up new sources of inward investment for France.
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