The importance of international tax treaties

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Nowadays there are 116 tax treaties binding France to other countries. Often overlooked or swept with a wave of the hand, yet they are the first elements to consider for those who leave France . Of paramount importance, tax treaties govern double taxation cases and define the tax liability of non-residents.

What is double taxation?

The meeting of two tax laws can lead to a double taxation for the taxpayer.

Tax treaties are intended to prevent the taxpayer from being taxed twice because of the simultaneous application of the tax laws of both Contracting States. They will also help address conflicts arising from the appointment of the fiscal domicile in organising direct and indirect taxation of taxpayers.

The taxation of non-residents

For each income category , there are three methods of taxation :
◦ Either taxation is exclusive in the State of residence
◦ Either taxation is exclusive in the State of source
◦ Either taxation is non-exclusive in the State of source

For example, the Franco-Swiss Convention of 1966 amended by subsequent amendments organises the taxation of French residents in Switzerland, as well as the taxation of boaders workers.

How do I know if my country has a tax treaty with France?

The detailed list of tax treaties is available on the tax government website.  It’s possible to consult it for each country or overseas community, and see all texts governing the taxation of non-residents.

The complete list of countries that have signed a tax treaty is as follows:

South Africa / Bulgaria / Ethiopia / Jamaica / Morocco/ Poland / Switzerland /
Albania / Burkina Faso / Russian Federation / Japan / Mauritania / French Polynesia / Syria
Algeria / Cameroon / Finland / Jordan / Mayotte / Portugal / Thailand
Germany / Canada / Gabon / Kazakhstan / Mexico / Qatar / Togo
Saudi Arabia / Chile / Georgia / Kenya / Monaco / Quebec / Trinidad and Tobago
Argentina / China / Ghana / Kuwait / Mongolia / Central African Republic / Tunisia
Armenia / Cyprus / Greece / Latvia / Namibia / Republic of Korea / Turkey
Australia / Congo / Guinea / Lebanon / Niger / Czech Republic / Ukraine
Austria / Ivory Coast / Hungary / Libya / Nigeria / Romania / Venezuela
Azerbaijan / Croatia / Mauritius / Lithuania / Norway / United Kingdom / Vietnam
Bahrain / Denmark / India / Luxembourg / New Caledonia / Saint Pierre and Miquelon /
Bangladesh / Egypt / Indonesia / Macedonia / New Zealand / Senegal / Zambia
Belgium / United Arab Emirates / Iran / Madagascar / Oman / Singapore / Zimbabwe
Benin / Ecuador / Ireland / Malaysia / Uzbekistan / Slovakia
Bolivia / Spain / Iceland / Malawi / Pakistan / Slovenia
Botswana / Estonia / Israel / Mali / Netherlands / Sri Lanka
Brazil / United States / Italy / Malta / Philippines / Sweden

Why tax treaties are important?

It begs the question of the interest of a tax treaty when living in countries where even that the application of domestic law appears to be « relative ». Yet the answer is simple and compelling: in case of a dispute there are the ones who will set the rules to apply. It is easy to be carefree as all goes well, but in case of a problem forewarned is forearmed.

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