2013 France-China Convention: what the text limits

The France-China tax treaty was signed in Beijing on November 26, 2013, and has been in effect since December 28, 2014. It replaces the 1984 treaty. It caps dividends at 5 % for a company that directly holds at least 25 % of the capital, and at 10 % in other cases. Equipment royalties are taxed only on 60 % of their gross amount. For employees, the 183-day limit is calculated over any twelve-month period beginning or ending during the tax year in question. The treaty does not address inheritances.

This page reads the consolidated text published by the French administration and the BOFiP list. It says nothing about Chinese law itself.

A 2013 agreement that replaces the 1984 agreement, the MLI in 2023

The agreement. Signed in Beijing on November 26, 2013, with a protocol forming an integral part thereof, it entered into force on December 28, 2014 and replaces the agreement of May 30, 1984. The administrative list of conventions classifies it as relating to income tax («IR»), without an amendment.

The MLI. The multilateral convention applies to this text since January 1, 2023, for taxes withheld at source and since March 1, 2023, for other taxes (BOI-ANNX-000511, dated April 29, 2026). The French tax authorities publish a consolidated version.

The taxes in question (Article 2, paragraph 3, list introduced by "in particular"). In France: income tax, corporation tax, and contributions on corporation tax. In China: personal income tax and corporate income tax.

Maximum deductions and key rules

Who is a resident? Article 4

Paragraph 2 addresses the case of a person resident in both States. It considers, in order: the permanent home; the center of vital interests if the person has a home in each State; habitual residence; nationality; and finally, the agreement of the competent authorities. The text ends at point (d): there is no fifth rule. Our page on Article 4 B of the French General Tax Code (CGI) explains French tax domicile.

Dividends: 365 days of direct ownership

Article 10, paragraph 2(a), sets a limit of 5 % of the gross amount if the beneficial owner is a company that directly holds at least 25 % of the capital of the paying company, "throughout a 365-day period including the day of payment of the dividends." Paragraph (b) sets a limit of 10 % in all other cases.

The text reserves the 5 % rate for a company, with direct ownership and a duration of 365 days which includes the day of payment.

Interest and royalties: 10 %, with a reduced base for equipment

Article 11 § 2 caps the tax levied by the State of source at 10 % of the gross amount of interest. Article 12 § 2 does the same for royalties.

Point 6 of the protocol reduces the tax base for one category: royalties paid for the use of industrial, commercial, or scientific equipment "will be taxed at 60 percent of the gross amount." Applied to the ceiling of 10 %, the effective rate is 6 % of the gross amount, as confirmed in the BOFiP commentary of November 20, 2024.

Capital gains: 25 % of capital, 36 months for real estate

Article 13 distinguishes three cases. Gains on shares or rights in a company whose assets consist, at any time during the 36 months preceding the sale, of more than 50% of their value in real estate, are taxable in the State where the assets are located (§ 4). Gains on shares of a company resident in another State are taxable in that State if the transferor held, at any time during the 12 months preceding the transfer, at least 25% of the share capital (§ 5). All other gains are taxable only in the State of residence of the transferor (§ 6).

Employees: 183 days over any twelve-month period

Article 15, paragraph 1, reserves taxation to the State of residence, unless the employment is exercised in the other State. Paragraph 2(a) provides an exception: the stay must not exceed a total of 183 days "during any twelve-month period commencing or ending in the relevant tax year." Two further conditions apply: the employer must not be a resident of the other State, and the expense must not be borne by a permanent establishment or fixed base.

The text is read in its entirety before any calculation: it is the twelve-month period that counts, linked to the tax year in question.

Pensions and teachers

Article 18 states that pensions and similar remuneration paid to a resident for previous employment "are taxable only in that State," subject to Article 19, paragraph 2, concerning public remuneration. Article 20 provides for professors and researchers to be exempt from taxation in the host State for up to 36 months.

Eliminating double taxation: Article 23

For France, Article 23 § 1 a) states that "Chinese tax is not deductible from this income" and that French residents are entitled to a tax credit against French tax. According to the text, this credit "may not exceed the amount of French tax corresponding to this income." Paragraph b) defines two amounts: the corresponding French tax (net income multiplied by the tax rate actually applied or, in the case of a progressive tax scale, by the ratio between French tax on total net income and this total net income) and the tax paid in China, i.e., the Chinese tax ultimately borne. The BOFiP commentary adds that the flat-rate tax credits of the 1984 agreement have been abolished.

The main object criterion (MLI)

Article 24 denies a benefit of the Convention for an item of income if it is reasonable to conclude that obtaining it was one of the principal purposes of an arrangement or transaction. A note in the consolidated text presents this as resulting from the combined application of Article 24 of the Agreement and Article 7, paragraphs 1 and 2, of the MLI. It should be read in conjunction with the facts of each case.

Inheritance and gifts: the convention does not address these.

The administrative list only provides information for China: "IR": no mention of inheritance or gift.

What this page does not cover

This page does not detail the protocol except for points 4 and 6, nor permanent establishments, nor navigation rules, nor the special cases of article 11. It says nothing about the Chinese definition of residence, Chinese domestic tax rates, application to the IFI, nor the regime of Hong Kong and Macao.

Dividends, royalties and missions in China: a numerical example (fictitious profile)

Situation. A French company (fictitious profile) directly holds 40 % units of a Chinese company for over 365 days and receives €200,000 in gross dividends. It also grants the use of industrial equipment for €100,000 in gross royalties (assumptions).

Issue. She wants to know the maximum retention levels in China.

Strategy. It applies Article 10 § 2 a) for dividends, then Article 12 § 2 with the basis of 60 % from point 6 of the protocol.

Result. Dividends are subject to a maximum tax of €10,000 at 5 %, compared to €20,000 at 10 % if the holding condition were not met, representing a difference of €10,000. For equipment royalties, the base is €60,000 and the maximum tax is €6,000, or 6 % of the gross amount; excluding equipment, the ceiling would be €10,000.

Second case: an employee residing in France, employed by a French company, undertakes three assignments in China: 70 days from October 1 to December 9, 2026, 60 days from February 1 to April 1, 2027, and then 60 days from June 1 to July 30, 2027. This amounts to 70 days in 2026 and 120 days in 2027, totaling fewer than 183 days in each calendar year. Over the twelve-month period from October 1, 2026, to September 30, 2027, the total is 190 days: the threshold is exceeded by 7 days, assuming this period begins during the tax year in question. The two other conditions of Article 15 remain to be examined.

This profile is fictitious. The calculations do not take into account French income tax or the tax credit under Article 23.

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 over 365 days.
• The number of days spent in China in each twelve-month period.
• The nature of the equipment or right that is the subject of the fee.

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