The 1992 France-Venezuela tax treaty: withholding tax at 5% and tax credit

The convention between France and Venezuela was signed in Caracas on May 7, 1992, and entered into force on October 15, 1993. It covers income taxes, including, according to Article 2, paragraph 2, taxes on gains from the sale of movable or immovable property, and, on the French side, the payroll tax. Its distinctive features include: ceilings of 5% on dividends, interest, and royalties; an exemption on dividends for companies holding at least 10% of the capital; and a French tax credit, a fixed portion of which ceased to apply on October 15, 2003.

Restrictive measures by the European Union targeting Venezuela do exist: the French Treasury's website (published on March 19, 2026) mentions asset freezes, sectoral and military embargoes, and an embargo on internal repression equipment, based on Regulation (EU) 2017/2063. This page does not describe them and does not indicate whether a given payment is affected: their content should be verified with the French Treasury.

A text from 1992, a transitional provision that has since expired.

The administrative list (BOI-ANNX-000306, April 29, 2026) gives the line "Venezuela, May 7, 1992, IR": no amendment, no note. The BOFiP (BOI-INT-CVB-VEN) indicates Law No. 93-841 of June 14, 1993, and Decree No. 94-25 of January 4, 1994 (Official Journal of January 12, 1994). Article 29 applies the convention to amounts allocated or paid from January 1, 1994, for withholding taxes, and to tax periods beginning from that date for other income taxes. Venezuela is not included in the list of conventions modified by the multilateral convention (BOI-ANNX-000511, April 29, 2026).

Article 2, on the French side, addresses income tax, corporation tax, and payroll tax, and makes no mention of inheritances or gifts. No article heading addresses wealth taxation.

Maximum deductions and key rules

Who is a resident? Article 4

Article 4, paragraph 1, considers a person liable for tax in a State by reason of their domicile, residence, place of management, or a similar criterion. It excludes a person who is taxed only on income from sources located in that State. In the case of dual residence of an individual, paragraph 2 considers, in order: the State where they have a permanent home; if they have a home in both States, the one with which their personal and economic ties are closest (center of vital interests); if this center cannot be determined or if they have no home in either State, the State where they habitually reside; then their nationality; and finally, the agreement of the competent authorities.

Dividends: 5 %, or no withholding tax for a corporation

Article 10, paragraph 2(b), sets a ceiling of 5 % for dividends. It adds an exemption: these dividends are not taxable in the State of the distributing company if the beneficial owner is a company that directly or indirectly holds at least 10 % of that company's capital. The rate of 15 % in paragraph (a) refers to dividends under paragraph 3, that is, those which, if received by a resident of France, would entitle them to a tax credit. The 1992 legislation provides for a payment from the French Treasury to the resident of Venezuela for these dividends, after deduction of the tax under paragraph 2(a). How this rate applies to a dividend paid today must be examined on a case-by-case basis.

Interest and royalties: 5 %, with targeted exemptions

Articles 11, paragraph 2, and 12, paragraph 2, cap withholding tax at 5% of the gross amount for the beneficial owner. Article 11, paragraph 3, exempts interest in the source state in three cases: the debtor is that state, a local authority, or a public legal entity; the interest is paid to the other state or one of its local authorities; or it remunerates financing granted under official aid for foreign trade or agreements between the two states. Paragraph 7 limits the application of the article to interest agreed upon by a debtor and a beneficiary without any special relationship; any excess remains taxable according to the legislation of each state.

Article 23: A two-tiered tax credit

For France, Article 23 § 1 a takes into account income from Venezuela in the calculation of French tax, as Venezuelan tax is not deductible from this income, but the recipient is entitled to a tax credit. This rule applies when the recipient is a resident of France and the income is not exempt from corporate income tax under French law. The amount of the credit depends on the income:

• for income from the items mentioned in point ii (in particular dividends from § 2 of Article 10, interest, royalties and gains from paragraphs 1 and 2 of Article 13): the amount of tax paid in Venezuela, without exceeding the corresponding French tax; ;
• for other income: the amount of French tax corresponding to that income.

Section 1 b ii recognized, for ten years from the date of entry into force, a tax credit for Venezuelan tax that should have been paid but had been exempted or reduced by a temporary incentive scheme. This period could be extended by mutual agreement. According to the BOFiP (French Official Tax Bulletin), this flat-rate credit ceased to apply on October 15, 2003, and, according to the same document, since that date no credit is available for interest and royalties paid if they were not actually taxed in Venezuela, and the credit corresponds to the tax actually paid, up to a limit of 5 % and the corresponding French tax.

Section 1(c) provides for referral to the competent authority: if Venezuelan tax on interest or royalties exceeds the corresponding French tax, the resident of France may submit his case to the competent French authority, which may, under the conditions it determines, allow the unused amount to be deducted from French tax on other foreign-source income.

Two reservations regarding the protocol and Article 22

Point I of the protocol stipulates that the convention does not prevent France from applying Articles 209 B and 212 of its General Tax Code, nor any similar provisions that may amend or replace them. Point X prohibits subjecting a resident who owns dwellings in the other State to income tax assessed on a flat-rate basis determined according to the rental value of those dwellings.

Article 22 § 2 sets aside the rule of other income when the beneficiary carries out an industrial or commercial activity in the other State through a permanent establishment, or a self-employed profession through a fixed base, and the generating right is effectively connected therewith: Articles 7 or 14 then apply.

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

Situation. Nadia, a fictitious profile, a resident of France, holds a claim against a Venezuelan company and receives €30,000 in gross interest. Her holding company also receives €40,000 in gross dividends from another Venezuelan company.

Issue. She wants to know the ceilings of the source and the place of the French tax credit.

Strategy. It applies the 5 % cap of Article 11 § 2 to interest, then the credit cap of Article 23: tax paid in Venezuela, without exceeding the corresponding French tax. Assumptions: Venezuela actually levies 5 % (€1,500), the corresponding French tax is €1,000. For dividends received by its holding company, it reads Article 10 § 2 b: 5 %, and no withholding tax if the holding company directly or indirectly owns at least 10 % of the capital.

Result. Interest is subject to a maximum of €1,500; under the assumptions above, €1,500 is effectively deducted. The tax credit is €1,000 (€1,500 capped at the corresponding French tax), and €500 is not allocated, which refers to the possibility of contacting the competent authority as provided for in paragraph 1(c). Dividends of €40,000 would be subject to a maximum of €2,000 if the holding company does not meet the 10 % condition. If it does meet this condition, the agreement does not impose any withholding tax on this dividend. The corresponding French tax is an assumption, unrelated to any tax brackets, and the calculation ignores social security contributions. The tax credit assumes that the income is not exempt from corporation tax under French law (Article 23, paragraph 1(a)): this point remains to be verified for the holding company.

What this page does not cover

It does not detail Articles 5 to 9, 13 § 1 to 4, 14, 16, 17, 19 to 21, 24 to 28, nor the details of points II to IX of the protocol. It does not describe Venezuelan tax law or the rates it applies. The restrictive measures mentioned in the introduction are not described here; the French Treasury Directorate General (DG Trésor) notes that consolidated texts of the European Union are generally published with a delay. Local taxation should be verified with a professional based in Venezuela.

What changes depending on your situation

• Your residence as defined in Article 4, year by year.
• The nature of the income and the article that refers to it.
• Your status as an individual or a company, and your share of the capital.
• The tax actually paid in Venezuela, compared to the corresponding French tax.
• The existence of a permanent establishment or a fixed base in the other State.

The rule depends on your situation. No results are guaranteed.