The France-Ethiopia tax treaty: three withholding tax ceilings

The France-Ethiopia convention caps the tax of the State of source at 10 % for dividends, 5 % for interest and 7.5 % for royalties.

A 2006 agreement, in force since July 17, 2008

The convention was signed in Paris on June 15, 2006. It was approved by Law No. 2008-130 of February 13, 2008 and published by Decree No. 2008-747 of July 28, 2008. It entered into force on July 17, 2008. For withholding taxes, it applies to income received from August 1, 2008 (Article 30).

The administrative list of conventions in force on January 1, 2026 (BOI-ANNX-000306, dated April 29, 2026) classifies it solely under the heading "IR," income tax. It makes no mention of wealth or inheritance tax. Article 2 § 3 a) also cites, in France, corporate income tax, payroll tax, CSG (General Social Contribution), and CRDS (Contribution to the Repayment of the Social Debt). Ethiopia is not included in the list of conventions modified by the multilateral convention (BOI-ANNX-000511).

Maximum deductions and key rules

A ceiling per income

Article 10 sets the highest ceiling: 10 % of gross income for dividends. Article 11 sets 5 % for interest. Paragraph 3 of Article 11 waives this ceiling for loans "granted or guaranteed, directly or indirectly" by a government, its territorial authorities or political subdivisions, or by the national banks of states, "provided that the guarantee was given in favor of a loan granted to government institutions." Article 12 sets 7.5 % for royalties.

These percentages are maximums for the source state, not the rate applied by Ethiopia under domestic law, which is outside the scope of this page.

Resident of both States: the order of Article 4

The text defines a resident as a person subject to taxation in a State under its legislation (Article 4, paragraph 1). If a person is resident in both States, paragraph 2 specifies, in order:

1. the State where she has a permanent home; if she has one in each, that of her centre of vital interests; ;
2. failing that, the State where she habitually resides; ;
3. failing that, the State of which she is a national; ;
4. If no criterion resolves the matter, the competent authorities settle the issue by mutual agreement.

French tax residence is addressed on our page about exit tax and tax residence.

Salaries: 183 days over a twelve-month period

Article 15, paragraph 2, provides an exception when the stay in the other State does not exceed a total of 183 days "during any period of twelve consecutive months beginning or ending in the calendar year concerned." The text adds two conditions: the employer is not a resident of the other State, and the remuneration is not borne by a permanent establishment or fixed base there.

Eliminating double taxation in France

For a resident of France, Article 23 § 2 provides for the tax credit method, in two forms. For dividends, interest, and royalties (Articles 10, 11, and 12), the credit is equal to the tax paid in Ethiopia, up to the limit of the corresponding French tax. For other income, it is equal to the corresponding French tax, provided that this income is subject to Ethiopian tax.

What this page does not cover

It does not address Ethiopian domestic law, its rates, special corporate regimes, the anti-abuse clause in paragraph 6 of Article 10, self-employment, mutual agreement procedures, or the exchange of information. Nor does it address the IFI (Wealth Tax).

What changes depending on your situation

• Your residence as defined in Article 4.
• The nature of the income: dividend, interest, royalty, salary or pension.
• The actual schedule of your stays, over the twelve-month window provided for in the text.
• The employer's specific conditions for the 183-day exception.