The France-Oman tax treaty: royalties capped at 7%, dividends and interest without tax rate

The France-Oman convention sets a single withholding tax ceiling: 7% of the gross amount of royalties. Dividends are taxable only in the recipient's country. Interest is taxable only in the source country if it relates to a permanent establishment or fixed base located in that country. This page presents the articles we have read in the consolidated text and explains what it does not cover.

A text from 1989, two amendments, the MLI since 2021

The convention was signed on June 1, 1989, and entered into force on August 1, 1990. A first amendment, signed on October 22, 1996, entered into force on February 1, 2004. A second amendment, signed on April 8, 2012, entered into force on March 1, 2013. It applies to sums paid from January 1, 2014, and to requests for information relating to accounting years or periods beginning on or after that date. It modifies the treatment of royalties in Article 10 and adds Article 21 A on the exchange of information. The administrative list (BOI-ANNX-000306, dated April 29, 2026) classifies the convention among those concerning income, wealth, and inheritance.

The convention is amended by the multilateral convention (MLI). According to the BOI-ANNX-000511 list, the effects in France begin on January 1, 2021, for taxes withheld at source and on May 1, 2021, for other taxes. The consolidated text adds a clause before Article 1: a benefit of the convention is not granted for an item of income if obtaining that benefit was one of the principal purposes of an arrangement, unless granting it is consistent with the object and purpose of the convention.

The three capital incomes, three different rules

Dividends. Article 8 deviates, in paragraph 4, if the beneficiary has a permanent establishment or fixed base in the State of the debtor to which the participation is effectively connected. Paragraph 2 allows a resident of Oman who receives dividends from a French company to claim a refund of the French withholding tax actually paid.

Interests. Article 9 refers to income from receivables "of any kind", including government bonds.

Royalties. Article 10 is the only one to contain a figure. The tax of the source state may not exceed 7 percent of the gross amount of royalties, provided that the beneficial owner is a resident of the other state. Paragraph 2 defines royalties as remuneration of any kind paid for the use of, or the right to use, any copyright, patent, trademark, design, secret formula or process, or know-how. Paragraph 3 waives this rule if the beneficiary has a permanent establishment or fixed base in the source state to which the right relates. Paragraph 5 limits the treaty to the normal amount if special connections inflate the royalty.

Royalties of €80,000: numerical example (fictitious profile)

Situation. A company based in Oman, a fictitious profile, licenses a trademark to a French company and receives €80,000 in gross royalties over the year.

Issue. She wants to know the maximum tax that France can withhold at source under the convention.

Strategy. It applies the ceiling of Article 10, paragraph 1, then verifies that the conditions of beneficial ownership and absence of a permanent establishment in France are met, and that the clause on entitlement to benefits does not exclude it.

Result. The cap is €5,600 (7 % of €80,000), leaving a balance of at least €74,400 before any tax in the beneficiary's country. With €120,000 in gross royalties, the cap would be €8,400. This calculation shows the maximum allowed by the treaty, not the actual tax due.

Capital gains: the state of the transferor, except for real estate and equity investments

As a general rule, Article 11 (§ 2) reserves the taxation of gains to the State of residence of the transferor, unless the transferor has a permanent establishment or a fixed base in the other State. Three cases are exceptions. Gains on immovable property are taxable where the property is situated (§ 1 a). The same applies to gains on securities of a company whose assets consist of more than 80% of immovable property, if the State where the immovable property is located treats them as capital gains on immovable property (§ 1 b). Finally, the transfer of a substantial interest, that is, a right to more than 25% of the company's profits, is taxable in the State of residence of the company (§ 3).

Dual residence: the order of article 4

Article 4 defines a resident as any person subject to taxation in the State under its legislation. For an individual resident in both States, paragraph 2 applies, in order: the permanent home, or failing that, the center of vital interests; the habitual residence; nationality; and finally, the agreement of the competent authorities. For other persons, it is the place of effective management.

When the convention applies, the concept of resident takes precedence. French tax domicile is addressed on our page regarding Article 4 B of the French General Tax Code (CGI).

Employees, self-employed professionals, pensioners

Salaries (Article 13). They are taxable only in their state of residence, unless the employment is carried out in the other state. Paragraph 2 provides an exception for a stay not exceeding 183 days in total during the tax year in question, with an employer not resident in the other state and remuneration not borne by a permanent establishment or fixed base. The text refers to the tax year, not to twelve consecutive months. Professors and researchers benefit from an exemption of up to 24 months.

Liberal professions (article 12). Taxable in the State of residence, except for a regular fixed base in the other State.

Pensions (Article 14). Subject to Article 15, pensions and similar remuneration paid to a resident for previous employment are taxable only in their state of residence. Article 15 (public service) covers remuneration and pensions paid by a state or one of its local authorities for services rendered to that state: paragraph 1 restricts them to that state, with exceptions not detailed on this page. Social security pensions are taxable in the state whose legislation governs their payment.

Fortune (article 16 A) and inheritance (article 17)

Fortune. Real estate is taxable in the state where it is located, subject to certain conditions; substantial shareholdings in the state of the company are taxed, while other assets are taxed in the state of residence. For a French resident who is a citizen of the Sultanate of Oman without French nationality, assets located outside France that they own on January 1st of each of the five years following the calendar year in which they become a resident of France are not subject to the French wealth tax (ISF) for each of those five years (Article 16 A, paragraph 5). This text refers to the ISF; its application to the real estate wealth tax (IFI) is not established by the sources consulted, and this page does not address it.

Inheritance. Real estate is subject to inheritance tax only in the state where it is located. Other personal property, including securities, is taxable only in the state where the deceased was resident at the time of death. This convention deals with inheritances; gifts are not addressed here.

Article 18: Three provisions excluding income

• Residence in France (§ 1). Residents of Oman who own private residences in France, without having their tax domicile there, are exempt from income tax established on the basis of rental value.
• Nationality criterion (§ 3). If a person is resident in a State only by virtue of nationality, the other State may refuse them the exemptions or reductions provided for.
• Anti-escape (§ 5). Internal rules against evasion and fraud remain applicable.

Eliminating double taxation in France

Article 19 stipulates that tax paid in Oman is not deductible from taxable income in France; a tax credit is granted. For royalties under Article 10 and gains under paragraphs 1 and 3 of Article 11, the credit equals the tax paid in Oman, up to the amount of the corresponding French tax. For other income, it equals the amount of the corresponding French tax. Oman avoids double taxation through its legislation. Article 21A governs the exchange of information: a state cannot refuse information solely on the grounds that it is held by a bank.

What this page does not cover

Omani tax rates, the concept of the tax year in Oman, Article 7 on navigation, the amicable settlement procedure, application to the French wealth tax (IFI), and gifts are not addressed. The French tax authorities' commentary on the exemption from the French wealth tax (ISF) for Omani residents owning real estate in France (BOI-INT-CVB-OMN) dates from 2015 and concerns the ISF; we do not apply it to the IFI. Local taxes are discussed on our page about living in Oman.

What changes depending on your situation

• Your residence as defined by the convention, and the role of your nationality.
• The nature of the income: dividend, interest, royalty, capital gain, salary, pension.
• The existence of a permanent establishment or a fixed base in one of the two States.
• The number of days spent in each state during the fiscal year.
• The nature and location of your assets, for wealth and inheritance purposes.

An article should be read in light of the facts in your case, and no result is guaranteed in advance.