France-Panama tax treaty: rates of 5 % and 15 %, and list of non-cooperative tax jurisdictions

The convention between France and Panama was signed in Panama on June 30, 2011. It has been in force since February 1, 2012, and applicable since January 1, 2013. It caps the tax levied by the state of source at 5 or 15 on dividends, 5 on interest, and 5 on royalties. It applies only to income tax. Panama is also on the French list of non-cooperative states and territories (NCSTs): this page provides information on the sources regarding this combination.

A 2011 agreement, applied since 2013, amended by the MLI

Steps according to the BOFiP and the Official Journal: Law No. 2011-2013 of December 29, 2011, Decree No. 2012-167 of February 2, 2012, effective February 1, 2012. Article 28 sets the application for January 1, 2013 for withholding taxes, other income taxes and other taxes.

It replaces the 1995 tax agreement (exchange of letters of 6 April and 17 July 1995, in force on 29 October 1996), which ceases to have effect on the date of application of the corresponding provisions.

The administrative list of conventions modified by the Multilateral Convention (MLI) includes Panama: effective January 1, 2022, for withholding taxes, and September 1, 2021, for other taxes. This page presents the consolidated text published by the French tax authorities, which incorporates the MLI, and compares it to the original 2012 text published in the Official Journal. The consolidated text has been reviewed without changes to the rates, thresholds, or duration of Articles 10 § 2, 11, 12, 13 § 1, and 14 § 2. Article 25 is replaced by the "Right to Benefits" clause of the MLI (see below).

Panama on the French list of non-cooperative tax jurisdictions: what the texts say

The annex to the 2027 draft budget states: "To date, 11 states and territories are on the French list of non-cooperative states and territories." It cites Panama, in the list resulting from the decree of April 15, 2026.

For dividends paid to a non-resident individual, the tax authorities indicate a rate of 12.80 % (rate in effect as of January 1, 2026, see the "My Dividends" page). They add that the withholding tax rate "is increased to 75 %" for income paid outside France to a non-cooperative tax jurisdiction (ETNC). The BOFiP (Official Bulletin of Public Finances) specifies that the provisions of the French General Tax Code (CGI) apply to ETNCs "subject to tax treaties." A summary table (BOI-ANNX-000480) cites, in particular, Articles 119 bis, 125 A, 187, and 244 bis of the CGI.

The sources consulted do not specify which of these two rules applies to a French dividend paid to a resident of Panama. This page does not provide a definitive answer.

The convention's ceilings in a table

Dividends: 10 % for direct ownership, 5 % or 15 %

The 5 % rate requires a company, excluding partnerships, to directly hold at least 10 % of the capital of the company paying the dividends. All other cases fall under the 15 % rate. Paragraph 2 does not specify a holding period. The protocol contains a twelve-month requirement for a class of bearer shares converted into registered shares, which this page does not detail.

Interest and royalties: 5 % on each side

Article 11 limits withholding tax to 5% of the gross amount of interest. It reserves taxation in the state of residence for states and local authorities, including the central bank, for certain credit sales, for claims insured or subsidized by a state, and for interest between financial institutions. Article 12 establishes the principle of taxation in the state of residence and limits withholding tax to 5% of the gross amount of royalties.

Capital gains: over 50 %, 25 % and the rest

Article 13 distinguishes five cases: gains on immovable property, taxable where the property is located; securities whose assets consist of more than 50% of their value in immovable property, taxable in the State where that property is located; movable property of a permanent establishment; the transfer of a shareholding entitling the holder to 25% or more of the profits of a company, taxable in the State of that company; and ships and aircraft. All other gains are taxable only in the State of residence of the transferor.

Salaries: 183 days over twelve months that begin or end in the fiscal year

Article 14 mandates that wages be paid where the employment is performed. The 183-day exception applies if three conditions are met: the stay does not exceed 183 days in total over any twelve-month period that begins or ends during the fiscal year; the employer is not a resident of the other state; and the expense is not borne by a permanent establishment. A numerical example illustrates the effect of this exception. Our page on the 183-day rule details the methodology.

Pensions and public functions

Private pensions are taxable only in the state of residence (Article 17, paragraph 1). Public salaries are taxable only in the paying state (Article 18, paragraph 1(a)). The exceptions and paragraph 2 of Article 17 are not detailed here.

Who is a resident? The tax authority certificate

Article 4 § 2 distinguishes between natural persons resident in the two States: permanent home, then center of vital interests; habitual residence; nationality; amicable agreement of the authorities.

On the Panamanian side, the French tax authority (DGI) indicates that France is number 5 on its list of 17 tax treaties. It issues a tax residency certificate to individuals: applications are submitted via e-Tax 2.0, with a response in approximately three months, requiring, among other things, a notarized copy of the passport and a certificate of immigration history. The DGI website page is undated.

Panama offers tax exemptions, France grants a tax credit

For a resident of France, income taxable in Panama is included in the French tax base without deduction of Panamanian tax, but with a tax credit. This credit is equal to the corresponding French tax for income other than that referred to in (ii). For income covered in particular by Articles 7, 10, 11, and 12, it is equal to the tax paid in Panama, without exceeding the corresponding French tax.

For a resident of Panama, Article 21 § 2 provides for the exemption of income taxable in France: Panama exempts this income, while taking it into account when calculating tax on other income.

Exchange of information and entitlement to benefits

Article 24, paragraph 5, prohibits withholding information "solely because it is held by a bank." In the consolidated text, Article 25 is replaced by the "Right to Benefits" clause of the MLI: a benefit of the convention is not granted if one of the principal objects of an arrangement or transaction was to obtain it, unless it is consistent with the object and purpose of the relevant provisions. The convention is concluded for an unlimited duration; it may be terminated through diplomatic channels at least six months before the end of any calendar year (Article 29).

Neither fortune nor inheritance is mentioned in the text.

Article 2, from the Panamanian perspective, refers to the income tax under the Tax Code, and no wealth tax is listed. The administrative list is labeled "IR" for Panama, without mention of inheritance or gift tax.

The 183 days of Article 14: a numerical example (fictitious profile)

Situation. Marc, a fictional profile, an employee of a French company, makes three trips to Panama: from November 1 to December 15, 2025 (45 days), from February 1 to May 10, 2026 (99 days), from September 1 to October 20, 2026 (50 days).

Issue. He wonders whether the threshold of 183 days in Article 14 § 2 has been exceeded for the 2026 tax year.

Strategy. It compares two calculations: the calendar year 2026, then the twelve-month period from November 1, 2025 to October 31, 2026, which ends during the year 2026.

Result. In the calendar year 2026, there are 149 days. Over the twelve-month period, there are 194: the threshold is exceeded by 11 days. The twelve-month window therefore changes the result. The two other conditions (employer, permanent establishment) remain to be examined. The dates are hypothetical, and the fiscal year is assumed to be the same as the calendar year.

What changes depending on your situation

• Your residence as defined in Article 4, if you have links with both countries.
• The nature of the income: dividend, interest, royalty, gain, pension, salary.
• Your status as a natural person or company, and your direct share of the capital.
• The number of days spent in Panama in each twelve-month period.
• Panama's status on the list of non-cooperative tax jurisdictions as of the date of payment.

What this page does not cover

Neither the Panamanian tax itself, nor the effects of the MLI beyond the reviewed articles, nor the articulation between the list of ETNCs and the convention ceilings, nor Article 18, nor the amicable procedure.