On March 23 2009 France and Jersey entered into a tax information exchange agreement, which came into effect on January 1 2011.

One of the key benefits of the agreement is that Jersey investment funds and real estate holding structures are now eligible to qualify for exemption from the French 3% real estate tax which is assessed annually on the fair market value of real property in France. The exemption also extends to interests, shares and units in certain intermediate structures that hold French real estate assets.

The agreement means that the following vehicles qualify for exemption from the 3% French tax in respect of real estate interests in France:

  • Jersey companies which directly own property in France;
  • Jersey limited partnerships whose general partner is a Jersey company and which own property in France; and
  • Jersey companies which are trustees of Jersey unit trusts which own property in France.

In order to obtain the 3% tax relief, the relevant Jersey entity must file an annual return disclosing the residence of the investors and the current fair market value of the property.

As the agreement has been ratified by both the French Parliament and the States of Jersey, France will now treat Jersey as a territory which has signed an administrative assistance agreement in relation to tax matters.

The latest agreement is consistent with Jersey's policy of constructive international engagement and highlights the mutual respect between Jersey and France. Jersey is committed to staying at the forefront of well-regulated international financial centres and complies with international standards of financial regulation.

Jersey has previously entered into similar agreements with 19 other countries.(1) Discussions are also underway with Spain and Italy, among others. Jersey is in the process of extending its network of tax information exchange agreements to include other countries.

For further information on this topic please contact Michael Lombardi at Ogier by telephone (+44 1534 504 000), fax (+44 1534 504 444) or email ([email protected]).


(1) The United States, the Netherlands, the seven Nordic countries (Denmark, the Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden), Germany, the United Kingdom, Ireland, Australia, New Zealand, Portugal, China, Turkey, Mexico and Canada.