Quick Answer
The France-UAE Double Tax Treaty has been in force since 1 July 1990 and was substantially amended by a Protocol signed on 6 December 1993, in force from 1 June 1995. Under the amended treaty, dividends, interest, and royalties flowing between France and the UAE carry a 0% withholding tax, taxable exclusively in the recipient’s country of residence rather than at source. That replaces France’s standard domestic withholding rates of 12.8% on dividends to non-resident individuals and 25% on dividends to non-resident companies for anyone who can prove UAE tax residency.
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France-UAE Double Tax Treaty at a Glance
The treaty was signed on 19 July 1989 and entered into force on 1 July 1990, with its income tax provisions effective from 1 January 1990. A significant amending Protocol followed, signed on 6 December 1993 in Abu Dhabi and effective from 1 June 1995, which is the version that eliminated source-country withholding tax on dividends and interest. For the general framework of how these agreements operate, allocate taxing rights, and prevent double taxation, see our guide to how UAE double tax treaties work.
| Detail | Date / Status |
|---|---|
| Original treaty signed | 19 July 1989 |
| Original treaty entered into force | 1 July 1990 |
| Amending Protocol signed | 6 December 1993 |
| Amending Protocol entered into force | 1 June 1995 |
| Current status | In force, as amended by the 1993 Protocol |
| Scope | Income tax, and (for individuals) wealth and succession tax provisions |
Withholding Tax Rates Under the Treaty
The commercial value of this treaty sits almost entirely in the withholding tax article. Before the 1993 Protocol, France applied withholding tax at source on dividends and, in some cases, interest paid to UAE residents. The Protocol removed that source taxation and moved to exclusive residence-state taxation for these three income categories.
| Income type | France’s standard domestic WHT (no treaty) | Rate under the France-UAE treaty |
|---|---|---|
| Dividends (paid to non-resident individuals) | 12.8% | 0% |
| Dividends (paid to non-resident companies) | 25% | 0% |
| Interest | Generally nil to reduced under domestic law, varies by instrument | 0% |
| Royalties | Up to 25% under domestic law absent treaty relief | 0% |
On the UAE side, there is no domestic withholding tax on outbound payments to non-residents in any case, so the treaty’s withholding article mainly benefits UAE residents receiving France-source income. For the broader mechanics of how withholding tax applies to cross-border payments generally, see our guide to withholding tax in the UAE.
Determining Residency Under the Treaty
The treaty’s relief only applies to a genuine tax resident of one of the two states. Where an individual could otherwise be treated as resident in both France and the UAE, the treaty applies a tie-breaker test in sequence: first, where the individual has a permanent home available; second, where their center of vital interests lies (personal and economic ties); third, their habitual abode; and finally, nationality. In practice, an individual who spends more than 183 days a year in France and keeps their family home there is very likely to be treated as a French tax resident under this test, regardless of a UAE visa or Emirates ID.
For companies, the treaty and its permanent establishment (PE) article determine whether a French business creates a taxable presence in the UAE, or vice versa. A PE includes a place of management, branch, office, factory, workshop, or a construction site that continues for more than six months. Preparatory or auxiliary activities such as storage or display do not, on their own, create a PE.
Worked Example: Claiming 0% Withholding on French Dividends
A UAE-resident holding company owns shares in a French operating company and is due a dividend of EUR 200,000. Absent treaty relief, the French paying agent would withhold 25% (EUR 50,000) at source, since the recipient is a non-resident company. By providing a valid UAE Tax Residency Certificate and the relevant treaty relief documentation to the French paying agent before the distribution, the UAE holding company reduces the withholding to 0%, receiving the full EUR 200,000. The figures here are illustrative only; the actual rate a payer applies depends on correctly filed relief-at-source paperwork, and a failure to file in advance typically means paying the standard rate first and reclaiming the difference afterward.
How to Claim Treaty Relief
A UAE resident receiving France-source dividends, interest, or royalties generally needs to:
- Obtain a UAE Tax Residency Certificate from the Federal Tax Authority via EmaraTax, confirming tax residency for the relevant period.
- Identify the correct income category (dividends, interest, royalties, business profits, employment income) since each is governed by a different treaty article.
- Submit the Tax Residency Certificate and supporting income documentation to the French paying agent (for relief at source) or to the French tax administration (for a refund claim if withholding was already applied at the standard rate).
- Where the standard rate was withheld first, file a reclaim before the applicable French time limit expires, since these are not open-ended.
A French resident with UAE-source income follows the mirror process: since the UAE does not levy personal income tax or a general corporate withholding tax, there is typically little or no UAE tax to credit against a French tax liability, so the practical question is usually how the income is characterized and reported in France rather than any credit calculation. For the general mechanics of claiming relief as an individual under a UAE tax treaty, see our guide to individual foreign tax relief and tax treaties, and for the residency certificate process itself, see our UAE Tax Residency Certificate service.
Frequently Asked Questions
Is the France-UAE double tax treaty still in force?
Yes. The treaty has been in force since 1 July 1990 and remains in effect today as amended by the Protocol that entered into force on 1 June 1995.
What withholding tax applies to dividends paid from France to a UAE resident?
0%, provided the UAE resident holds a valid Tax Residency Certificate and files the correct relief documentation. Without treaty relief, France’s standard domestic rate is 12.8% for individuals or 25% for companies.
Do UAE residents pay tax in the UAE on France-source income?
The UAE does not levy personal income tax, and most passive investment income falls outside the scope of UAE Corporate Tax for individuals. A UAE-registered business receiving such income may still need to account for it under Corporate Tax if the income is connected to a licensed business activity.
How does a UAE resident prove residency to claim the 0% rate?
By obtaining a Tax Residency Certificate from the Federal Tax Authority through EmaraTax and submitting it, along with income documentation, to the French payer or tax authority.
Does the treaty cover capital gains?
Capital gains are addressed separately from the dividends, interest, and royalties articles. Gains on French real estate generally remain taxable in France; gains on most other assets are typically taxable only in the seller’s state of residence, subject to the treaty’s specific conditions.
What creates a permanent establishment under this treaty?
A fixed place of business such as a management office, branch, factory, workshop, or a construction project lasting more than six months. Purely preparatory or auxiliary activities do not.
Tax Consultant Dubai
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How Tax Consultant Dubai Can Help
Claiming treaty relief correctly depends on documentation filed before payment, not after, and on classifying income under the right treaty article. Our team prepares Tax Residency Certificate applications and advises on cross-border structuring for UAE residents and businesses with French income streams.
Contact Tax Consultant Dubai today to review your France-UAE tax position and file for treaty relief correctly.
