The France-Bolivia tax treaty: withholding tax at 15% and the most-favored-nation clause of the protocol

The France-Bolivia convention caps dividends, interest, and royalties at 15% of the gross amount. Its protocol contains a specific clause: if Bolivia grants lower rates to an OECD member state, these rates automatically supersede those of the convention. Signed in La Paz on December 15, 1994, it entered into force on November 1, 1996.

A text from 1994, without any mention of an amendment

According to the doctrine (Article 28, version in force since November 4, 2016), the convention applies in France to withholding taxes levied from November 1, 1996, to other income taxes for income earned from January 1, 1997, and to wealth tax for wealth held on or after January 1, 1997. The administrative list (BOI-ANNX-000306, dated April 29, 2026) includes it among those concerning income and wealth, without mentioning any inheritance law provisions. Bolivia is not included in the list of conventions amended by the MLI. Article 2, on the French side, concerns income tax, corporate tax, wealth tax, and payroll tax.

Bolivia: Maximum Detentions and Key Rules

Clause 5 of the protocol

Point 5 refers to Articles 10, 11, and 12. If, in a convention with a third OECD member state, Bolivia limits withholding tax on dividends, interest, or royalties to lower rates (including zero) or to a narrower scope, these rates automatically replace those of the convention, effective from the date of entry into force of the agreement with the third state. The official guidance (BOI-INT-CVB-BOL) indicates that this clause came into effect after the Bolivia-Spain convention of June 30, 1997: withholding tax on dividends reduced to 10 % for a company directly holding at least 25 % of the capital, taxation solely in the state of the beneficiary for certain interest (related to the sale of industrial, commercial, or scientific equipment) and certain copyright royalties (literary, theatrical, musical, or artistic, excluding films). The official guidance does not specify an application date.

Dividends of €30,000: a numerical example (fictitious profile)

Situation. A Bolivian resident shareholder, fictitious profile, receives €30,000 in gross dividends from a French company, and €50,000 in interest.

Issue. He wants the maximum amount that France can retain.

Strategy. He first applies the ceiling of Article 10 § 1, then asks whether the clause in point 5 lowers the rate in his situation.

Result. At 15% of the % rate, the cap is €4,500 on dividends and €7,500 on interest. With the 10% rate cited in the tax guidelines for certain companies, it would be €3,000 on dividends. These are maximums, not the actual tax due, and the application of this clause to his specific case remains to be verified.

Residence, earnings and wealth

Article 4, paragraph 2, distinguishes between dual residence: permanent home, then center of vital interests, habitual residence, nationality (if residence is in both states or neither), and amicable agreement. Article 13 distinguishes between real estate, taxable where located, and shares in companies subject to the same regime as real estate (paragraph 2); no threshold of 50 is specified. Article 22 links real estate assets to the state where they are located. The text refers to the wealth tax: the IFI (French real estate wealth tax) is not addressed here.

Tax credit and reporting

Article 23, paragraph 1(a), grants a tax credit against French tax in two cases. For income or capital taxable only in Bolivia, the credit is equal to the amount of French tax corresponding to that income or capital. In other cases, it is equal to the tax paid in Bolivia in accordance with the provisions of the convention, up to the amount of French tax. Termination of the convention is possible from the fifth calendar year following its entry into force, with at least six months' notice (Article 29).

What this sheet does not cover

Bolivian tax, details of interest exemptions, social security pensions, the protocol beyond point 5 and the IFI are not addressed.

What changes depending on your situation

• Your residence as defined in the agreement.
• Your percentage ownership and its direct nature.
• The nature of the income and the date of payment, in relation to the agreements concluded by Bolivia.

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