The France-Thailand tax treaty, article by article

The France-Thailand tax treaty was signed in Bangkok on December 27, 1974. It applies only to income tax: no inheritance tax, no gift tax, and no wealth tax. It caps dividends at 15 or 20 13T, but only when the beneficiary is a company that directly holds at least 25 13T of the capital. For employees, the 183-day limit is calculated per fiscal year, not over a rolling twelve-month period.

This page reads the consolidated text published by the French administration, which includes the exchange of letters from 1999 and 2000, and the commentary from the BOFiP.

A text from 1974, an exchange of letters in 2000, the MLI in 2023

The convention. Signed on December 27, 1974, with a protocol which forms an integral part thereof, it entered into force on August 29, 1975. Its title: Convention "for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income".

The exchange of letters. The letters of August 20, 1999 and March 6, 2000, which entered into force on March 6, 2000, interpret Article 11: they relate to the concept of participation by a public financing body.

The MLI. The multilateral convention has applied to this text since January 1, 2023, for withholding taxes as well as other taxes. It entered into force for Thailand on July 1, 2022. The preamble now aims to eliminate double taxation "without creating opportunities for non-taxation or reduced taxation.".

The taxes in question (Article 2). In France, income tax and corporate tax. In Thailand, income tax and oil revenue tax.

Maximum deductions and key rules

Who is a resident? Article 4

A resident is a person subject to taxation in a State by virtue of the legislation of that State. If a person is resident in both, Article 4 § 2 applies five rules in order: permanent home; failing that, center of vital interests; if this center cannot be determined, habitual residence; then nationality; and finally, the agreement of the competent authorities.

Dividends: a cap reserved for companies

Dividends are taxable in the recipient's country of residence. The paying company's country may also tax them, according to its legislation. Article 10, paragraph 2, sets a ceiling only in one case: the recipient is a company, excluding partnerships, that directly holds at least 25% of the paying company's capital. In this case, the tax cannot exceed 15% if the paying company is engaged in industrial activity, or 20% in other cases.

"Industrial activity" is defined in Section 3: it includes activities listed in the text and any activity recognized as such by the competent Thai authority. Section 3 should be read in its entirety to determine whether the paying company is subject to the 15 % rate.

For an individual, the paragraph does not specify a ceiling. The 10 % withholding tax from Section 50 of the Thai Revenue Code is a domestic tax rate, explained on our page about living in Thailand.

Interest and royalties

Interest is taxable in the country of residence. The country of origin may also tax it, up to a limit of 3 % or 10 %, depending on the circumstances shown in the table. The Thai tax authority's table for France includes both rates: 3 % for loans of at least four years with a public financing body, and 10 % for financial institutions.

Royalties follow the same logic: 5 % for copyright of a literary, artistic, or scientific work, and 15 % for others. The protocol lowers the ceiling for certain royalties on patents, processes, or know-how to 10 %, as long as the French rate on these royalties does not exceed 10 %. The Revenue Department table reproduces these three rates.

Employees and self-employed: 183 days in the tax year

Article 15 § 2 exempts the State of employment under three cumulative conditions: the stay does not exceed a total of 183 days "during the fiscal year concerned", the employer is not a resident of the host State, the remuneration is not borne by a permanent establishment or a fixed base which the employer has there.

The relevant period is the fiscal year, not a period of twelve consecutive months. Two assignments separated by a change of year are not cumulative. Article 14 maintains the same threshold of 183 days for self-employed professionals, with a fixed basic condition.

Pensions: the source state imposes

Article 18 states that pensions and remuneration for previous employment, originating in one State and paid to a resident of the other, "are taxable in the first-mentioned State," that is, the State from which they originate. The phrase "are taxable only in" does not appear. Article 19, paragraph 1, reserves for the paying State the taxation of public remuneration and pensions paid for functions of a public nature. What applies to your pension can be determined by considering both texts and the specific circumstances of the paying agency.

Real estate and capital gains

Income from immovable property is taxable in the State where the property is situated (Article 6). For France, the Protocol refers to French tax law for the definition of immovable property. Article 13, paragraph 1, links gains on immovable property and gains on "shares or similar rights in a real estate co-ownership company or in a company whose principal purpose is to hold immovable property" to the place where the property is situated. Article 13, paragraph 2, deals separately with movable property of a permanent establishment or fixed base, ships, and aircraft. Paragraph 3 addresses only other property: gains from such property are taxable only in the State of which the transferor is resident.

Eliminating double taxation: Article 23

France exempts income taxable in Thailand under the treaty and Thai legislation, except for income covered by Articles 8, 10, 11, 12, 16, and 17. For these six articles, it grants a tax credit equivalent to the tax paid in Thailand. For dividends, the credit cannot exceed 25% of their gross amount. Thailand applies a similar mechanism for income from French sources, with a different credit limit: the Thai credit is limited to the ratio between net income from French sources and total net income, with no 25% limit for dividends.

Inheritance and gifts: the convention does not address these.

The administrative list of tax treaties only provides information on income tax for Thailand. The columns for wealth, inheritance, and gifts are empty. Thailand has its own Inheritance Tax Act, which is explained on our page about living in Thailand.

Other articles and what this page does not cover

Articles 7 (profits and permanent establishment) and 8 (shipping) govern business income. Articles 16 (directors' fees), 17 (artists and athletes), 20 (students), 21 (teachers, stay limited to two years), and 22 (unspecified income) address specific cases. Article 25 establishes the mutual agreement procedure with the authority of the country of residence, and Article 26 the exchange of information.

This page does not detail the protocol, the content of the exchange of letters, the right to benefits arising from the MLI, nor the application of the convention to the IFI.

Dividends from Thai sources: numerical example (fictitious profile)

Situation. A French company, fictitious profile, directly owns 30 % of a Thai company which pays it €200,000 in gross dividends (assumptions).

Issue. She wants to know the maximum withholding tax in Thailand and the limit of the tax credit in France.

Strategy. It applies Article 10 § 2 depending on whether the Thai company has an industrial activity within the meaning of § 3, and then Article 23 for credit.

Result. The withholding tax cannot exceed €30,000 at 15% of the gross amount (%), or €40,000 at 20% of the gross amount (20% of the gross amount), a difference of €10,000. The French tax credit is capped at €50,000, or 25% of the gross amount, within the limit of the corresponding French tax, which this example does not calculate.

Second case: an employee residing in France, employed by a French company, undertakes two assignments in Thailand: 101 days from September 1 to December 10, 2026, and then 101 days from January 5 to April 15, 2027. Each fiscal year remains under 183 days. Over a rolling twelve-month period, the total would be 202 days. The two other conditions of Article 15 remain to be examined. The Thai tax authorities define the fiscal year as the calendar year.

This profile is fictitious. The calculations do not take into account either French taxation of dividends or the classification of industrial activity as defined in § 3.

What changes depending on your situation

• Your residence as defined in the agreement.
• The nature of the income: dividend, interest, royalty, salary, pension, gain.
• Your status as a company or individual, and your direct ownership.
• The number of days spent in Thailand in each fiscal year.

No outcome is guaranteed, and Thai law is validated with local advice.