US-France tax treaty explained for expats
If you’re an American living, working, or retiring in France – or dividing your life between both countries – your tax situation can get messy fast.
The US–France tax treaty is designed to prevent double taxation, clarify which country gets to tax what, and offer relief through credits, exclusions, and defined taxing rights. It can save you real money–and headaches. But you need to know the rules, file the right forms, and apply the treaty the right way.
This article explains the tax treaty between the US and France in plain English – no legalese, just what you need to know to stay compliant and keep most of your income.
US–France tax treaty summary
| Topic | Summary |
|---|---|
| Double taxation relief | You generally won’t be taxed twice on the same income if you file correctly and claim credits or exclusions. |
| Dual residency | If both countries claim you as a resident, the treaty decides which one gets taxing rights. |
| Foreign tax credit (FTC) | You can claim a credit on your US return for French income taxes paid, usually with Form 1116. |
| Income, inheritance & property rules | Income types (salary, dividends, pensions, and real estate) are taxed differently under the treaty. Inheritances and gifts are also protected to avoid double taxation. |
| Social security | You’ll pay into only one country’s system and may combine credits to qualify for benefits. |
| Filing requirements | Key forms: 8833, 1116, W-8BEN (US); 2042, 2047 (France). |
Yes, France has a tax treaty with the US, and it’s meant to reduce double taxation on income like salary, dividends, pensions, and some business profits. It does not cancel your US filing requirement as a citizen or green card holder, and it does not automatically change state tax rules.
It also doesn’t cover French social contributions in the way people assume – those are a separate topic from the treaty’s income tax rules.
What is the US–France tax treaty?
The US–France tax treaty is an agreement between the United States and France that prevents situations where the same income is taxed by both countries.
The treaty defines which country gets taxing rights based on the type of income and where you live. It also outlines how tax credits, exemptions, or exclusions apply to avoid being taxed twice.
In addition to the income tax treaty, there's a lesser-known estate and gift tax treaty. This agreement helps cross-border families, especially those with property or heirs in both countries, avoid inheritance taxes and navigate estate planning more effectively.
Where to read the official text
The most reliable “start here” source is the IRS treaty hub for France (it links to the treaty text and related official documents).
What the treaty covers vs doesn’t
- Covers: income tax rules (who taxes what) and how double taxation relief works under the treaty framework.
- Doesn’t cover: French social contributions in a simple “treaty eliminates it” way, and it doesn’t rewrite US state tax law.
- Separate agreement: Social Security coverage is handled by the totalization agreement, not the income tax treaty.
Income tax treaty ≠ estate/gift treaty
The French-American tax treaty people talk about day to day is usually the income tax treaty – but families with cross-border assets often need the estate and gift treaty too.
Practical examples that come up in real life:
- A US citizen living in France still has US filing obligations, but the estate and gift treaty can matter when US-situs assets (like US stocks held directly) are in the picture at death.
- A French spouse who is not a US citizen can trigger special estate-planning questions, where treaty rules and US marital deduction limits can collide.
- A France-based family with property in both countries may need the treaty to sort out credits when both countries claim taxing rights over the same transfer.
Who does the US–France tax treaty apply to?
The US–France income tax treaty applies to you if you’re a:
- US citizen, green card holder, or resident alien with income from France
- French tax resident with income from the US
- dual resident under US and French tax law (living in or earning from both countries)
NOTE! If you’re a dual-status alien – taxed as a US resident for part of the year and nonresident for the rest – the treaty may still impact how certain income is treated. You’ll need to apply the treaty’s tie-breaker rules carefully.
Also read. Filing US tax returns for dual-status aliens
Article 4 of the US–France tax treaty provides a five-step tie-breaker test to determine residency for treaty purposes. It looks at where you have a permanent home, where your personal and economic ties are stronger, and where you habitually reside.
How to avoid double taxation with the US–France treaty
Americans living in France can avoid being taxed twice on the same income through a mix of treaty benefits and US tax code provisions.
Most of the time, the most common mechanism is the foreign tax credit on Form 1116, supported by the treaty’s relief-from-double-taxation rules (Article 24). The FEIE is a separate US-law tool – for the 2025 tax year (filed in 2026), the foreign earned income exclusion amount is $130,000.
One detail that drives the math: resourcing rules can “relabel” certain income for credit purposes, which can change how much credit you can actually use in a given year.
Foreign tax credit (FTC)
Foreign tax credit allows you to offset your US tax liability with income taxes you’ve paid to France. FTC relief is addressed in Article 24 (Relief from Double Taxation). In practice, US taxpayers usually claim the FTC on Form 1116 for French income taxes paid, subject to the FTC limitation rules.
Example: If you earn €130,000 in France, you might pay around €31,000 in French income tax. Your US tax on that income would be about $23,000 – so the foreign tax credit wipes out your US bill.
Re-sourcing of income
Re-sourcing rules (in the treaty’s double-tax relief framework) can treat certain income as foreign-source for FTC purposes in limited cases, to prevent double taxation. This is technical and should be applied carefully.
Christensen v. United States (2023)
In Christensen v. United States (2023), the US Court of Federal Claims ruled that foreign tax credits (FTCs) can be used to offset Net Investment Income Tax (NIIT) under the France and US tax treaty. This 3.8% surtax, typically applied to passive income like dividends and capital gains, had not previously been creditable. The Internal Revenue Service (IRS) initially denied the claim, but later conceded.
US citizens who paid NIIT and foreign taxes on the same income may now be eligible for refunds by amending prior returns. Taxes for Expats hosted a webinar explaining this ruling, who qualifies, and how to amend past returns.
This is a court development tied to treaty Article 24 in the NIIT context – consult a tax pro before taking a treaty-based position.
Foreign earned income exclusion (FEIE)
Foreign earned income exclusion is not part of the tax treaty – it's a standalone US tax provision under IRC Section 911. Nonetheless, it’s worth mentioning because many US expats in France combine the FEIE and treaty benefits to minimize double taxation.
FEIE allows you to exclude $130,000 for the 2025 tax year (to be filed in 2026) of earned income if you meet the bona fide residency or physical presence test.
FEIE can’t be combined with the foreign tax credit on the same income. You can, however, use both on different types of income.
Example: You work for a French company and also receive US investment income. France taxes your salary; the US taxes both. You could use the FEIE on Form 2555 to exclude your salary, and the FTC for taxes paid on dividends – or reverse it. Which works best depends on your income mix, tax rates, and filing status. High earners in France often benefit more from the credit, while those with moderate earned income may prefer the exclusion.
Need help choosing the right option? Tax professionals at Taxes for Expats can analyze your situation and help you save the most – while staying fully compliant.
What is the saving clause to the US–France tax treaty?
The treaty includes a saving clause that allows the US to continue taxing its citizens and green card holders as if the treaty didn’t exist, with limited exceptions.
Even if the treaty treats you as a resident of France, the US can still tax your worldwide income unless a specific article says otherwise.
Always check whether a treaty benefit is exempt from the saving clause before relying on it.
How are different types of income treated by the tax treaty?
| Income type | Treaty article | Source-country tax (treaty rule) | Conditions + how you claim it (1-liner) |
|---|---|---|---|
| Dividends | Art. 10 | 15% cap (general); 5% for qualifying corporate holders (10% ownership) | Must be beneficial owner; US-source: file W-8BEN/W-8BEN-E with broker; France-source: 5000 + 5001 (often with US 6166) |
| Interest | Art. 11 | Often 0% at source (residence-only taxation in many cases) | Watch special interest types; claim via W-8BEN (US payor) / 5000 + 5002 (France payor) |
| Royalties | Art. 12 | Generally capped at 5% at source; certain copyright-type royalties can be 0% | Common confusion: royalties vs services; claim via W-8BEN / 5000 + 5003 |
| Capital gains (securities) | Art. 13 | Usually no withholding; taxing rights depend on residency rules | US citizens/GC: treaty doesn’t erase US filing/tax due to saving clause – relief often via FTC (1116) |
| Real property (rent + gains) | Art. 6 + 13(1) | Taxed where property is | Still report in residence country + usually claim FTC |
| Employment (salary) | Art. 15 | Taxed where work is performed (with classic day-count/employer/PE tests) | Add a mini checklist (days threshold + employer not resident + no PE bearing cost) |
| Independent services / business profits | Art. 14 and/or 7 | Residence taxation unless fixed base / PE in other country | Add 2 examples: remote freelancer (no PE) vs office/fixed base (PE risk) |
| Pensions + Social Security | Art. 18 | Private pensions: usually residence; Social Security: typically paying country | Your current SS line should be tightened to match treaty language; add totalization link separately |
Dividends and interest (Articles 10 & 11)
The treaty limits US tax on dividends to 15%, or 5% in certain qualifying ownership cases, and it can reach 0% in limited situations for certain qualifying pension funds that meet the treaty conditions. Interest is generally tax-free in the source country if the recipient resides in the other.
Example: If you live in France and hold US stocks, your broker may withhold 15% on dividends – unless you file Form W-8BEN to claim the treaty benefit.
How to actually get the reduced rate
- US-source dividends/interest: give your broker or payer Form W-8BEN (individuals) to claim the treaty rate instead of default withholding.
- French-source dividends: France’s standard treaty-claim process typically runs through Form 5000 (certificate of residence) plus Form 5001 (dividend withholding calculation/refund), filed through the channels described by the French tax authority.
The treaty limits US tax on dividends to 15%, or 0% for certain pension or retirement accounts. Interest is generally tax-free in the source country if the recipient resides in the other.
Capital gains (Article 13)
Capital gains on securities (like stocks) are taxed where you reside. But real estate gains are taxed in the country where the property is located.
Example: A US citizen living in France sells Apple stock – only France can tax the gain. But if they sell a rental condo in Miami, the US still taxes the capital gain.
NOTE!
- Real property gains are generally taxed where the property sits, even if you live elsewhere.
- Some gains tied to a permanent establishment can be treated differently from simple portfolio investing.
- Where you reside depends on treaty residency concepts, not just domestic labels – and US citizenship-based taxation can still pull the gain onto a US return, with relief often coming through credits rather than not reporting it.
Royalties (Article 12)
Royalties from patents, copyrights, and similar rights are taxed only by your country of residence – source-country taxes are waived.
Rental income (Article 6)
Rental income is always taxed where the property is located. You may also need to declare it in your country of residence and use tax credits to avoid double taxation.
Employment income (Article 15)
Income from work is taxed where the employment is physically performed, regardless of where your employer is based.
When the salary stays taxable only in the resident country
- Presence in the work country is 183 days or less during the relevant period.
- Pay is made by (or on behalf of) an employer who is not a resident of the work country.
- The pay is not borne by a permanent establishment that the employer has in the work country.
Self-employment income (Article 7)
Self-employment income is taxed where you have a permanent establishment. If you run your freelance business from France with no US office, only France can tax it.
A permanent establishment is a meaningful, ongoing business presence in a country – usually a fixed place of business (like an office) or a dependent agent who routinely signs contracts there.
Freelancer examples that make this click
- A consultant living and working in France with clients in the US usually doesn’t create a US permanent establishment just because the clients are American.
- Renting a small office in the US for ongoing work, or having someone in the US who regularly closes deals in your name, can push you closer to permanent establishment territory.
Pensions and social security (Articles 17 & 18)
Benefits paid under a country’s social security system are generally taxable only in the paying country. Special rule: French social security paid to a French resident who is a US citizen is taxable only in France.
What counts as pension and how US retirement accounts fit:
- Pension in treaty language generally covers retirement payments for past employment – the category is broader than the word pension on a paystub.
- Distributions from US retirement accounts like a 401(k) or IRA can raise classification and timing questions, especially when France and the US treat the same account differently.
- Citizenship-based filing still applies even when the treaty gives France primary taxing rights – the usual goal becomes avoiding double tax with credits and correct reporting, not skipping the US return.
-
Form 8833 is required for certain treaty-based return positions, but not for every situation – it depends on what position is being taken.
The US–France estate & gift tax treaty
In addition to the income tax treaty, the France–US estate and gift tax treaty helps avoid double taxation on inheritances and gifts. It assigns exclusive taxing rights for certain assets – for example, real estate is only taxed in the country where it’s located, even if the owner or heir lives in another country.
It also allows tax credits when both countries tax the same transfer, and uses tie-breaker rules to resolve dual domicile cases. This matters most for cross-border families and French heirs of US estates.
The US–France totalization agreement
The US–France totalization agreement coordinates both countries' social security systems to prevent double contributions and ensure you don’t pay into both for the same work. This is especially relevant for Americans working in France or French nationals working in the US.
Under the agreement, you generally pay social security taxes to only one country – typically where the work is performed.
If you’re temporarily transferred (for five years or less), you can stay under your home country’s system and avoid paying into the other.
To claim this exemption, request a Certificate of Coverage:
- US workers going abroad: Request from SSA here.
- French workers in the US: Apply through France's CLEISS.
Totalization agreement also lets you combine coverage credits earned in both countries to qualify for retirement, disability, or survivor benefits.
Find more information here:
How it works
- One system collects social security taxes at a time, based on where the work is covered under the agreement.
- A temporary assignment often stays in the home system for up to five years, but the certificate is what proves it to payroll.
- A Certificate of Coverage matters anytime payroll might otherwise withhold into both systems – especially on cross-border assignments and secondments.
How to claim tax treaty benefits: forms and rules
To claim tax treaty benefits properly, you’ll need to file the correct forms with both tax authorities.
| Common scenario | What you do | Where filed / submitted | Typical mistake |
|---|---|---|---|
| US-source dividends/interest/royalties paid to a France resident (non-US person) | Give the payer Form W-8BEN (individual) or W-8BEN-E (entity) and claim the treaty rate | To the withholding agent/broker (not to the IRS) | Sending W-8BEN to IRS / not updating after “change in circumstances” / claiming treaty rate without being the beneficial owner |
| French-source dividends paid to a US resident (reduce/reclaim French withholding) | Use Form 5000 (residence certificate) + attach Form 5001 (dividends) | Typically submitted via the financial intermediary/payer per French process; forms are French tax authority forms | Filing only 5000 but forgetting the 5001 annex for dividends (normal procedure) |
| French-source interest paid to a US resident (reduce/reclaim) | Form 5000 + Form 5002 (interest) annex | To payer/intermediary / French-side treaty relief flow | Using 5001 (dividends) instead of 5002 (interest), or not matching the income type tick-box on 5000 |
| French-source royalties paid to a US resident (reduce/reclaim) | Form 5000 + Form 5003 (royalties) annex | To payer/intermediary / French-side treaty relief flow | Treating service fees as “royalties” (wrong category) / missing 5003 annex |
| You need proof of US tax residency for France treaty paperwork (common with 5000 flows) | Request Form 6166 by filing Form 8802 | To IRS (8802) → IRS issues 6166 | Assuming your 1040 transcript replaces 6166 (often it doesn’t) / starting too late (processing + mailing time) |
| You take a treaty-based position on your US return (e.g., residency tie-breaker, certain treaty claims) | Attach Form 8833 to your US return when required | Filed with your US tax return (typically Form 1040) | Skipping 8833 when residency is determined under the treaty (IRS highlights this) |
| You paid French income tax and want US relief (double-tax mitigation) | Claim Foreign Tax Credit (Form 1116) (when applicable) | Filed with your US return | Using FTC on income you excluded (e.g., FEIE overlap) / wrong basket / missing carryovers (operational errors that trigger notices) |
When to file US and French tax returns
US tax returns are due April 15, but Americans living abroad get an automatic extension to June 15 (for the 2025 return filed in 2026, that means June 15, 2026). Interest on any unpaid tax still starts from April 15.
Need more time? File Form 4868 to extend the deadline to October 15.
French tax returns are due mid-May to early June, depending on where you live and whether you file online. The exact dates change annually – check with impots.gouv.fr for the latest.
Claim the treaty benefits with Taxes for Expats
The US–France tax treaty can help you avoid double taxation and save thousands – but only if you apply it correctly.
At Taxes for Expats, we specialize in cross-border tax compliance for Americans living in France, French residents with US income, and dual-status taxpayers caught between two systems.
With over 20 years of experience helping US expats in France, we know exactly how to make the treaty work for you. Let us handle the paperwork, planning, and filings – so you don’t have to.
Taxes are complicated – get peace of mind with professional help.
FAQs on the tax treaty between the US and France
No, most US states don’t recognize international tax treaties. So even if the treaty reduces or eliminates your federal tax, your former state (like California or New York) may still expect a return. Each state has its own rules, so it’s smart to check with a tax pro or your state’s tax department to be sure you're fully in the clear.
Yes. US citizens and green card holders must file annually, no matter where they live. The treaty helps reduce tax owed, but it doesn’t remove the filing obligation.
Yes, but not on the same income.
Private pensions are usually taxed only in your country of residence. US social security is taxed only in France if you live there, a rare benefit under Article 18.
The USFrance estate and gift tax treaty helps avoid double taxation by assigning taxing rights and offering tax credits when both countries claim the same asset.
Yes. The United States France tax treaty sets rules on taxing rights and relief from double taxation, especially through treaty-defined treatment and credits.
Under the FranceUS income tax treaty, dividends are generally capped at 15% (5% in certain ownership cases), interest is generally exempt in the source country, and royalties often have a treaty cap depending on the type.
Form 8833 is used to disclose certain treaty-based return positions. It’s common in some situations, but not automatic for every treaty-related item.
State rules vary, and many states do not follow federal treaty outcomes the safest approach is checking the state’s residency and filing rules directly.
It usually means reduced withholding on certain cross-border payments and a clearer path to relief from double taxation using credits, backed by treaty articles and IRS rules.
