France-Brazil Tax Convention: a 1971 text, read article by article

The convention between France and Brazil was signed in Brasília on September 10, 1971. It concerns only income tax: no inheritance or gift tax. It sets ceilings of 15 % for dividends and interest, and three ceilings for royalties: 10 %, 25 %, or 15 %, depending on the nature of the right. It is not included in the list of conventions modified by the multilateral convention (MLI): it is interpreted as it was signed.

A 1971 agreement, outside the scope of the MLI

The text entered into force on May 10, 1972. Article 29 stipulates that it enters into force on the thirtieth day following the exchange of instruments of ratification. A protocol forms an integral part of it. The French administration's commentary (BOI-INT-CVB-BRA) has been in effect since July 17, 2024; it also mentions an exchange of letters dated February 5 and March 4, 1974.

The administrative list of conventions (BOI-ANNX-000306, version of April 29, 2026) gives the date of September 10, 1971, for Brazil and the taxes covered as "IR," meaning income tax only. The list of conventions amended by the MLI (BOI-ANNX-000511, same date) does not include Brazil: the entry should be between Bosnia and Herzegovina and Bulgaria, but it is not. This page therefore follows the signed text.

No inheritance, no fortune

Article 2, for France, concerns income tax and corporate tax, including withholding taxes and levies. For Brazil, it concerns federal income tax and profits of all kinds, "excluding the tax on excess transfers and on minor activities." The convention contains no article on inheritance. Wealth is addressed only in Article 27, paragraph 2, to exclude certain diplomatic and international agents. Inheritances between France and Brazil are handled separately by a local professional.

Maximum deductions and key rules

Royalties: 10 %, 25 % or 15 % depending on the law

Article 12 establishes three caps. Copyright royalties for literary, artistic, or scientific works are capped at 10 % of the gross amount, as is the use of motion pictures and films or television or radio broadcasts produced by a resident of either state. Royalties paid for the use of a trademark are capped at 25 %. Other cases are capped at 15 %. This scale necessitates classifying each stream before calculating the amount: a trademark royalty, a copyright, or a film royalty do not have the same cap.

Brazilian royalties: a numerical example (fictitious profile)

Situation. Marc, a resident of France, fictitious profile, receives from Brazilian sources €40,000 in royalties for the use of a trademark, €12,000 in copyright fees and €18,000 in royalties falling under the "other cases" of Article 12 § 2 c).

Issue. He wants to know the maximum tax that Brazil can levy at source under Article 12 § 2. Assumption: Brazil has actually levied a tax on each of these flows.

Strategy. It applies to each flow the ceiling of its category: 25 % for the brand, 10 % for copyright, 15 % for other cases.

Result. The ceilings are €10,000, €1,200, and €2,700, totaling €13,900 on €70,000 of royalties. This is a ceiling, not a calculated Brazilian tax. For the "other cases" in Article 12 § 2 c), Article 22 § 2 d) considers the Brazilian tax as levied at a minimum rate of 20 %. The BOFiP (¶ 420) describes a flat-rate credit of 20 % on the gross amount of the royalties, i.e., €3,600 on €18,000 instead of €2,700. He adds, citing the French Council of State (July 26, 2006, No. 284930), that this tax credit is only applicable if the income was actually taxed in Brazil, and that it is not granted in the absence of any Brazilian tax. The credit remains limited to the corresponding French tax, which is not calculated here.

Dividends and interest: 15 %, with two exceptions for loans

For dividends, Article 10, paragraph 2, allows the state of the distributing company to levy up to 15 % of the gross amount; the beneficiary's state of residence may also tax them (paragraph 1). For interest, Article 11, paragraph 2, sets the same 15 % limit.

Two exceptions apply. Interest on loans and credits granted by a State's government is not taxed (§ 3 a)). A ceiling of 10 % applies to certain bank loans with a minimum term of seven years, linked to the sale of capital goods or industrial units and involving a public financing body (§ 3 b)).

Capital gains: real estate, then everything else in both states

Gains on immovable property are taxable in the State where the property is situated (Article 13 § 1). Gains on movable property of a permanent establishment are taxable in the State where it is situated; ships and aircraft in international traffic are taxable only in the State of effective management (§ 2).

Paragraph 3 is the most important for an individual: gains from the alienation of all other property or rights "are taxable in both Contracting States." The convention therefore does not limit these gains to the State of residence. Double taxation is then addressed by Article 22.

Employees: 183 days "during the fiscal year in question"«

Article 15 stipulates that the state of residence is the determining factor for wages, unless the employment is performed in the other state. An exception applies if three conditions are met:

• the beneficiary stays in the other State for a period or periods not exceeding in total 183 days during the tax year in question; ;
• the employer is not a resident of the other State; ;
• the remuneration burden is not borne by a permanent establishment or fixed base.

The text says "fiscal year," not "twelve consecutive months." The text does not define the fiscal year: the page does not definitively establish this calculation, which is determined by the legislation of each state. Our page on the 183-day rule explains the method.

Self-employed professions fall under Article 14: only the State of residence, unless the remuneration is paid by a permanent establishment or a company resident in the other State.

Public pensions and salaries

Pensions and similar remuneration paid in respect of previous employment are taxable only in the State of residence (Article 18, paragraph 1). Alimony and annuities are also taxable in that State (paragraph 2). For public remuneration, Article 19, paragraph 1, reserves taxation to the paying State, except for persons who are nationals of the other State.

Who is a resident?

According to Article 4, paragraph 1, a resident is any person who, under the legislation of the State, is subject to tax there. For an individual resident in both States, paragraph 2 applies, in order, their permanent home, center of vital interests, habitual residence, nationality, and then the mutual agreement of the authorities. For a company, the BOFiP (Official Bulletin of Public Finances) indicates that the place of effective management is the sole criterion.

Eliminating double taxation: exemption, credit and minimum rate of 20 %

Article 22 combines two methods. For France:

• income that Brazil can tax, excluding paragraphs b and c, is exempt from French taxes (§ 2 a)); ;
• dividends from a Brazilian company paid to a French company which holds at least 10 % are not subject to corporation tax for their gross amount; the share of expenses is limited to 5 % (§ 2 b)); ;
• for income from articles 10, 11, 12, 13, 14, 16 and 17 which has been subject to Brazilian tax, a credit equal to that tax is granted, within the limit of the corresponding French tax (§ 2 c)); ;
• for articles 10, 11 and 12 § 2 c), Brazilian tax is considered to be collected at a minimum rate of 20 % (§ 2 d)); ;
• French tax on exempt income can be calculated at the rate that corresponds to the total income (§ 2 e)).

For Brazil, Article 22 § 1 grants a tax credit equivalent to the tax paid in France.

Disputes and duration

A resident may submit their case to the competent authority of the State of which they are resident (Article 25, paragraph 1), without the time limit specified in that paragraph. The authorities shall exchange the necessary information, which shall be kept secret (Article 26, paragraph 1). The convention is concluded for an indefinite period; each State may denounce it with six months' notice through diplomatic channels, starting from the third year following its entry into force (Article 30).

France-Brazil Convention: What changes depending on your situation

• The exact nature of the income: a trademark and a copyright do not have the same ceiling.
• The nature of the asset transferred: building or other asset, since other gains are taxable on both sides.
• Your residence as defined in Article 4, if you have links with both countries.
• The fiscal year used for calculating the number of days.
• Your status as an individual or a company.

An article is read in light of the facts in your case; no result is guaranteed.

What this page does not cover

Articles 5, 7, 8, 9, 16, 17, 20, 21, 23, and 24, the details of paragraphs 3 and 8 of Article 10, the application of the convention to the IFI (French Wealth Tax), the rules of Brazilian domestic law, and case law. The BOFiP (Official Bulletin of Public Finances) also outlines rules for professors and students, which are not described on this page.