France-USA Double Tax Treaty

Updated on Friday 08th November 2019

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Double taxation is avoided by residents of the United States and French residents with respect to taxes on income and capital. The two countries have signed a comprehensive tax treaty that has also been amended by two protocols. The provisions of the double tax treaty between France and the United States concern only those individuals who are residents of one or both countries, except otherwise provided in the treaty. One of our French lawyers can provide legal advice and support for foreigners wanting to start a business in France.

Taxes covered by the France-US Agreement

The taxes which are subject to the convention signed between France and the United States are as follows:

for France: the income tax, the company tax, the salaries tax, the wealth tax;
for the United States: the federal income taxes imposed by the Internal Revenue Code (except the social security taxes) and the excise taxes imposed on insurance premiums paid to foreign insurers with respect to private foundations.

The convention applies on the taxes imposed on behalf of one of the states, irrespective of the manner in which they are levied. The treaty will also apply on any taxes imposed in place of or in addition to the ones described above, after the convention has been signed. Our French attorneys can give you additional information about taxation in France, if you are interested in investing there.

Other provisions of the treaty

The general definitions of the treaty establish that a “person” includes, but is not limited to, an individual or a company. An individual resident or company of one of the contracting states will be one that has the domicile, residence, place of management or place of incorporation in one of the states. Permanent establishments can be: offices, branches in France or in the U.S., factories, workshops and others.

According to the treaty, the dividends paid by a French company to a Unites States resident are subject to a 15% withholding tax in France. The withholding tax applied in France is a tax credit deductible from the US income tax. The double taxation treaty also establishes the taxation method for interest, royalties, business profits or director’s fees as well as income derived from real property in France or the U.S (including income from agriculture or forestry).

For detailed information about how the double tax treaty influences your business, if you are a foreign investor from the United States in France, please contact our French law firm.