France Tax Treaties with other countries

France has signed Double Taxation Agreements (DTA) with over 110 countries.
To avoid double taxation, tax deducted at source in France gives rise to an equivalent tax credit in the country of residence (depends on the tax treaty between France and the country of residence).

France Tax Treaties with Taiwan
France Tax Treaties with China

Email: par4ww@evershinecpa.com
Manager Zhu, speak in French English and Chinese

We set up below judgment criteria on Treaty application:

Scenario:
If you are not a France legal resident, and if your resident country has DTA with France, and if you are without PE (Permanent Establishment), please go to Section Ａ.
If you are not a France legal resident, and if your resident country has DTA with France, and if you are with PE (Permanent Establishment) please go to Section Ｂ.
If you are not a France legal resident, and if your resident country has no DTA with France, please go to Section C.

Section Ａ:
Scenario:
If you are not a France legal resident, and if your resident country has DTA with France, and if you are without PE (Permanent Establishment), it will be redeemed as “non-France Domestic Sourced Income”.
That means France will levy zero-tax.
However, you still need to send zero-tax application to France Tax Bureau for being approved.
Below, we will let you understand through Q&A.

DTA-Q-10:
法國的哪些外國法律居民公司可以依DTA申請沒有常設機構(PE)下零稅率?
In France, which foreign legal resident company can apply for zero tax rate without PE under DTA?

DTA-A-10:
France has signed DTAs with the following 110 countries:

DTA-Q-20:
為什麼在DTA下該國外資沒有常設機構 (PE)之外資所得，可以享受零稅率?
Why does the Country’s foreign capital without a permanent establishment (PE) in France, under the DTA enjoy zero tax rate?

DTA-A-20:
It follows Article 5 and Articles 7 in the DTA Treaty.
Article defines if a foreign entity has PE in France.
Article 7 regulates if no PE, non-France domestic sourced income will not be levied tax in France.

DTA-Q-30:
哪些情況被視為沒有PE，外資在該國設立子公司會被視為外資的在該國的子公司嗎?
Under what circumstances are deemed to have no PE, and will the establishment of a foreign-funded subsidiary in France be regarded as a foreign-funded subsidiary in France?

DTA-A-30:
According to DTA Article 5 item 7, A Wholly Foreign Owned subsidiary in France will not be treated as PE because it is a separate legal entity.
That means if a France Subsidiary pays a service fee to a non-France Parent Company through a service contract signed between a subsidiary and a non-France Parent company as an investor, non-France Parent Company can apply zero tax.
As for if the paid amount is reasonable, it will get involved TP (Transfer Pricing) judgment by France Tax Bureau.
Please see the France Transfer Pricing webpage.

DTA-Q-40:
外資在法國設立分公司或辦事處，可否適用沒有PE下的零稅率?
If a foreign company establishes a branch or office in France, can the zero-tax rate without PE be applied?

DTA-A-40:
According to DTA Article 5 item 2, If a foreign company sets up a branch or Office in France, then will be considered as France domestic Income.
But According to DTA Article 5 item 4, if an Office is only doing a preparatory or auxiliary activity, will apply zero-tax rate.

DTA-Q-50:
法國依DTA沒有PE下零稅率申請的程序為何?
What is the procedure for France to apply for zero tax rate under DTA without PE?

DTA-A-50:
Before payment for crediting,
Fill up Form 5000-EN (Certificate of Residence) (Valid for one year).
Enclose either Form 5001 (Dividends), Form 5002 (Interest), Form 5003 (Royalties) along with Form 5000.
Send the above forms to tax authorities of your country of residence for certifying.
Upon receipt of your certified forms, send them to the French Tax Authorities at “Foreign Business Tax Service – 10, rue du Center, TSA 20011, 93465 Noisy le Grand Cedex, France”

Deadline for claims:-
Unless otherwise stipulated in the tax treaty, French law stipulates that, in order to be valid, claims must be received by the French authorities by 31 December of the second year following the year in which the income was paid.

Section Ｂ:

Scenario:
If you are not a France legal resident, and if your resident country has DTA with France, and if you are with PE (Permanent Establishment), your income will be considered as France domestic sourced income.
As for levying Tax Rate, please be aware: if France Tax rate > DTA Rate, adopt DTA Rate; if France Tax rate < DTA Rate, adopt France Rate.
Below, we will let you understand through Q&A

DTA-Q-60:
被視為法國來源所得的判定要素?
What are the factors that are deemed to be the country’s domestic source income?

DTA-A-60:
The following are considered as income from French sources:
*Income from immovable property situated in France, from business concerns situated in France.
*Income from professional activities carried on in France.
*Capital gains on the transfer of property or rights of any kind.
*Capital gains on the transfer of corporate rights pertaining to companies having their head offices in France.
*Amounts, including salaries, in consideration of artistic or athletic performances supplied or used in France.
*Pensions and annuities
*Fees received by investor or as copyrights as well as any income derived from patent and similar rights.

DTA-Q-70:
DTA第五條及第七條優先於法國來源所得的判定要素?
Do Article 5 and Article 7 in the DTA take precedence over the France determination factors on France domestic sourced income?

DTA-A-70:
When DTA is applied, in the event of a different PE definition between France’s domestic tax laws and Article 5 in the DTA, the definition under the DTA shall prevail over the domestic regulations.
When DTA is applied, if a foreign company is defined as without PE (Permanent Establishment) in France, then will be considered non-France domestic sourced income, in the event business profit is relevant to this issue, the clause in Article 7 in the DTA zero-rate tax can be applied accordingly.
In this scenario, please see section A.

DTA-Q-80:
當非法國稅務居民有法國來源所得，不考慮DTA 情況下，法國稅法扣繳稅率多少?
When non-tax residents of France have France domestic sourced income, what is the withholding tax rate according to France tax regulations excluding DTA?

DTA-A-80:
Payments to non-resident corporations are subject to withholding tax.
The withholding tax rates under domestic law are:
Business Profits – 26.5%
Dividend – 26.5%/ 0% (EU Parent-Subsidiary Directive)
Interest (General loan) – 0%
Royalties fee – 26.5%/ 0% (EU Interest and Royalties Directive)
Technical services – 26.5%
Professional services – 26.5%

DTA-Q-90:
If DTA Tax Rate is higher than France tax rate, apply which tax rate?

DTA-A-90
As for levying Tax Rate, please be aware:
if France Tax rate > DTA Rate, adopt DTA Rate; if France Tax rate < DTA Rate, adopt France Rate.

DTA-Q-A0:
當非法國稅務居民有法國來源所得，依DTA優惠稅率申請的程序為何?
When non-tax residents of France have France domestic sourced income, what is France’s application procedure based on the DTA preferential tax rate?

DTA-A-A0:
Before payment for crediting, fill up Form 5000-EN (Certificate of Residence) (Valid for one year).
Enclose either Form 5001 (Dividends), Form 5002 (Interest), Form 5003 (Royalties) along with Form 5000.
Send the above forms to the tax authorities of your country of residence for certifying.
Upon receipt of your certified forms, send them to the French Tax Authorities at “Foreign Business Tax Service – 10, rue du Center, TSA 20011, 93465 Noisy le Grand Cedex, France”

Deadline for claims:-
Unless otherwise stipulated in the tax treaty, French law stipulates that, in order to be valid, claims must be received by the French authorities by 31 December of the second year following the year in which the income was paid.

Section C:

DTA-Q-B0:
As an investor, if your country has not signed DTA with France, what kinds of tax rates when you have France’s relevant income?

DTA-A-B0:
The withholding tax rates under domestic law are:
Business Profits – 26.5%
Dividend – 26.5%/ 0% (EU Parent-Subsidiary Directive)
Interest (General loan) – 0%
Royalties fee – 26.5%/ 0% (EU Interest and Royalties Directive)
Technical services – 26.5%
Professional services – 26.5%

Please be aware of below Warning:
The above contents are digested by Evershine R&D  and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Paris Evershine BPO Service Limited Corp.
Email: par4ww@evershinecpa.com
Manager Zhu, speak in French English and Chinese

or
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please send an email to HQ4par@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable to your case.
LinkedIn address: Dale Chen

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