France-Sri Lanka Tax Convention: Key Rules of the 1981 Text

The convention between France and Sri Lanka was signed in Colombo on September 17, 1981, and entered into force on November 18, 1982. It only covers income taxes. Its specific features include: a ceiling of 10 % on interest, royalties that are exempt or capped depending on their nature, and, on the French side, a tax credit as a percentage of the gross amount (25 %, 15 %, or 20 % depending on income), except for Articles 8, 14, and 15, where it equals the Sri Lankan tax collected.

A 1981 text, without an article on inheritance, outside of MLI

The administrative list (BOI-ANNX-000306, dated April 29, 2026) classifies the convention as "IR" (Income Tax) and does not mention any amendments. Sri Lanka is not included in the list BOI-ANNX-000511 of conventions amended by the MLI (Mission Liquor Informatisé). According to the BOFiP (BOI-INT-CVB-LKA), the approving law is Law No. 82-479 of June 10, 1982, and the publishing decree is Decree No. 83-61 of January 24, 1983. According to Article 27, the convention applies to the tax year beginning in the 1982 calendar year and subsequent years. The text contains no article on inheritances; they are only mentioned in Article 10, paragraph 3(b), in relation to a supplementary tax.

Maximum deductions and key rules

Resident: four tie-breaking stages

For a natural person resident in both States, Article 4 § 2 applies four criteria in order: the permanent home (in the case of a home in both States, the State of their closest personal and economic ties), the habitual place of residence, nationality, and then the agreement of the competent authorities.

Dividends: exemption for French companies, 15 % for a new contribution

Article 10 first states that dividends are taxable in the recipient's state of residence, and that the state of the paying company may also tax them according to its own legislation; paragraph 2 does not set a ceiling. The 5 % and 15 % in the table apply only to the cases described in paragraphs 3 and 4: the first caps a supplementary tax, the second a withholding tax related to a new contribution.

Interest: 10 % and four cases of exemption

Beyond the ceiling of 10 % of Article 11 § 2, the text exempts in particular the interest received by a banking institution (§ 1), certain financing of sales on credit or of equipment approved by the government of the payer (§ 3), the interest due to a credit institution resident in France on a loan granted to the Sri Lankan government or, with its approval, to a Sri Lankan body (§ 4) and the interest due to a government (§ 5).

France: exemption, except for fixed-rate tax credits

Article 21 A provides that income other than that covered by Articles 8, 10, 11, 12, 14, and 15 is exempt from French tax when taxable in Sri Lanka. For these six articles, the income is taxable in France with a tax credit: 25% of the gross amount for dividends under paragraphs 3 and 4 of Article 10, 15% for interest under Article 11, paragraph 2, 20% for royalties under Article 12, paragraph 2, and the Sri Lankan tax actually collected under Articles 8, 14, and 15. The credit cannot exceed the French tax payable on this income. French tax is calculated at the rate applicable to the total income.

What this page does not cover

The text does not include an article on capital gains: Article 20 allows the legislation of each state to apply unless otherwise stipulated. Its application to the French wealth tax (IFI) is not established. Sri Lankan law should be reviewed with a local professional.