Franco-American Tax Convention
The Franco-American tax convention regulates tax relations between France and the United States in order to avoid situations of double taxation and to determine the rules applicable to natural persons and businesses with interests in both countries.
Whether you are expatriates, business leaders, investors, employees, entrepreneurs or property owners, this agreement can have a significant impact on your tax situation. However, its interpretation requires an overall analysis of your personal situation, your tax residence and the nature of your income.
Why is there a tax treaty between France and the United States?
Economic relations between France and the United States are particularly important. Many taxpayers live, work or invest between the two countries.
Without a tax treaty, the same income could be taxed simultaneously in France and the United States.
The objective of the Franco-American tax convention is to:
- avoid situations of double taxation;
- determine in which State certain income may be taxed;
- establish the criteria for tax residence in the event of a conflict between the two countries;
- organise cooperation between the French and American tax administrations.
It thus constitutes a reference text for all cross-border tax situations between France and the United States.
Who is affected by the Franco-American tax convention?
The convention can apply to many situations, including when you:
- be a French tax resident and collect income from the United States;
- is an American tax resident with income from French sources;
- Consider an expatriation between France and the United States;
- own a property in one of the two countries;
- collect dividends, interest or royalties of American or French origin;
- engage in international professional activity;
- run a company operating in both states.
Each situation must be analysed individually in order to determine the actual rules applicable.
The main challenges of the France-United States tax treaty
The tax treaty addresses issues relating to:
- determination of tax residence;
- preventing double taxation;
- taxation of professional income;
- taxation of real estate income;
- dividends and distributions of companies;
- interest and royalties;
- certain capital gains;
- exchange of information between tax administrations.
However, the application of these provisions depends on many legal and fiscal criteria. An isolated reading of the convention does not always draw the right consequences.
Why call on an international tax lawyer?
International tax treaties are complex texts that must be interpreted in the light of French tax law, US law and applicable case law.
Edward Pruvost's firm supports French and international clients on all issues related to Franco-American taxation, including:
- tax residence;
- expatriation and international mobility;
- international investment;
- Foreign income;
- international tax control;
- heritage and entrepreneurial structure;
- prevention and resolution of double taxation situations.
Each case is analysed individually in order to secure your tax situation and limit the risk of litigation.
Consult the official tax convention
The official text of the tax convention between France and the United States is available on the website of the French tax administration.
You can view the official version by clicking on the following link:
Tax Convention between France and the United States (Official PDF)
https://www.impots.gouv.fr/sites/default/files/media/10 conventions/states-unis/states-unis convention-with-states-unis-impot-sur-le-revenue-impot-sur-la-fortune fd 1835.pdf
Be accompanied by a tax lawyer
Edward Pruvost's firm advises and assists you in all your Franco-American tax issues in order to secure your operations and effectively defend your interests with the tax administration.
