France-Algeria: an agreement covering income, wealth, and inheritance

The tax treaty between France and Algeria was signed in Algiers on October 17, 1999, and has been in effect since December 1, 2002. It covers income tax, wealth tax, and inheritance tax. It caps withholding tax at 15% on dividends (5% for a company holding at least 10% of the capital), at 10% or 12% on interest, and at 5%, 10%, or 12% on royalties, depending on whether the source is French or Algerian. This page is based on the official commentary from the French tax authorities; it does not reproduce the text of the treaty.

A 1999 text, applied since 2002, not cited in the MLI list

The convention includes a protocol which forms an integral part of it. It replaces the convention of May 17, 1982. It was approved by Law No. 2002-1036 of August 6, 2002, and published by Decree No. 2002-1501 of December 20, 2002. Withholding taxes apply to amounts paid since December 1, 2002, and other income taxes apply to income earned in 2002 or to fiscal years beginning in 2002.

The administrative list (BOI-ANNX-000306, version of April 29, 2026) classifies it under the heading "IR – IF – S" and does not cite any amendment. The list of conventions modified by the multilateral convention (BOI-ANNX-000511, 68 States, same date) does not mention Algeria.

Who is a resident? Four criteria, then an agreement

The convention applies only to residents of France or Algeria as defined in Article 4, regardless of their nationality. Residency is assessed on a person-by-person basis, not at the household level. For an individual who resides in both countries, the tax authorities' guidance outlines four criteria in this order, and, failing that, an agreement between the competent authorities:

1. permanent residence, that is to say a dwelling which you have at your disposal on a permanent basis: an apartment which is owned and not rented counts; ;
2. If you have a home in both states, the center of vital interests is the state with which your personal and economic ties are closest; ;
3. failing that, the state where you usually reside; ;
4. then the state of which you are a national.

This habitual residence is not the principal residence as defined in Article 4 B of the French General Tax Code (CGI). If nationality is not a determining factor, the competent authorities decide by mutual agreement; for both parties, this involves the Directorate of Tax Legislation. For a company, only the place of effective management is relevant.

Ceilings that are not symmetrical

The 5 % rate on dividends applies to a company, other than a partnership, that directly or indirectly holds at least 10 % of the capital of the distributing company. A mere intermediary cannot claim this rate. Films and audiovisual works are subject to the same rates as other royalties. For certain types of interest (credit sales of equipment or goods, loans from credit institutions), only the state of residence of the beneficiary can levy a tax.

These ceilings are maximums. The actual tax rate levied depends on the domestic law of the source country, which is not detailed on this page. To benefit from the treaty rate, forms 5001 (dividends), 5002 (interest), and 5003 (royalties) must be accompanied by the 5000 residence certificate.

Salaries, liberal professions, pensions

Wages. Article 15 designates the state where the activity is carried out. A temporary assignment remains taxable in the state of residence if three conditions are met: the stay does not exceed 183 days in total, the employer is not a resident of the state where the activity is carried out, and the remuneration is not borne by a permanent establishment or fixed base of the employer. The commentary counts in days of physical presence: arrival and departure days, fractions of a day, and weekends count, as do days of illness unless the illness prevents departure; simple transit between two points outside the state does not count. Successive stays are cumulative. The reference period for the threshold is found in the text, which is not reproduced on this page.

Liberal professions. Without a fixed basis, the State of exercise may tax from 183 days or more of stay in the tax year (Article 14).

Pensions. Private pensions linked to previous employment are taxable only in the beneficiary's state of residence (Article 18). Public pensions are taxable in the paying state (Article 19), with an exception for a beneficiary who resides in the other state, is a national of that state, but not of the paying state.

Buildings, capital gains, construction sites

The comment gives a practical consequence: the transfer by a resident of Algeria of shares in a French company is not taxable in France, even if the shareholding reaches 25 % or more, unless the company's main assets are real estate.

Wealth and inheritance: two dedicated articles

Fortune (article 22). Real estate, and shares in companies whose assets consist of more than 50% real estate, are taxable in the country where they are located. Other assets (securities, receivables, household furniture, gold, jewelry, works of art) are taxable only in the country of residence. The commentary dates from 2012 and concerns the French wealth tax (ISF): the application of these rules to the real estate wealth tax is not established by the sources consulted.

Successions (article 23). Real estate and shares in companies whose assets are primarily real estate are taxable in the state where they are located. Tangible personal property is taxable where it is at the time of death. Debts are taxable in the state where the debtor resides: the commentary cites an account in a French bank belonging to a deceased resident of Algeria, which is taxable in France. Other assets are taxable only in the state of residence of the deceased. Article 23 does not address duties due on gifts made during the deceased's lifetime.

Eliminating double taxation: two different credits

For a resident of France, Article 24 applies the tax credit. For dividends, interest, royalties, directors' fees, and income from artists and athletes, the credit is equal to the tax paid in Algeria, up to the limit of the corresponding French tax. For income from real estate, profits, capital gains, salaries, and public remuneration, the credit is equal to the French tax on this income, regardless of the tax collected in Algeria. Any excess credit is neither carried forward nor refunded. The commentary provides an exception for interest and royalties subject in Algeria to a withholding tax of 5% or 12%: this credit may be offset, under certain conditions, against other foreign-source income.

In inheritance matters, when the deceased resided in France, France first taxes the entire estate and then grants a tax credit for Algerian tax on assets taxable in Algeria. When the deceased resided in Algeria, France only taxes the assets allocated to it under Article 23, at the rate applicable to the total assets.

Amicable procedure, information, debt collection

The request for an amicable settlement procedure (Article 26) must be made by ordinary letter within three years of the first notification of the contested measure. States exchange information automatically or upon request (Article 27) and agree to provide assistance for the recovery of the taxes concerned (Article 28).

Withholding tax ceilings and 183 days: numerical example (fictitious profile)

Situation. A fictitious French resident receives €20,000 in dividends, €8,000 in interest, €4,000 in royalties from Algeria for literary, artistic, or scientific works, and €6,000 in other royalties. He is also employed by a French company and undertakes three missions to Algeria during the same fiscal year: 75, 50, and 38 days.

Issue. He wants to know the maximum tax that Algeria can collect at source according to the convention, and whether his missions remain below the threshold of 183 days.

Strategy. He applies the Algerian source ceiling to each income, then adds up the days of stay.

Result. Caps: €3,000 on dividends, €960 on interest (12 %), €200 on royalties, €720 on other royalties: a maximum of €4,880 on €38,000. If the source were French, the same €8,000 of interest would be capped at €800. His assignments total 163 days: a 20-day margin. A fourth assignment of 30 days would bring the total to 193 days, or 10 days above the threshold. The two other conditions of Article 15 remain to be examined, and the actual rate levied in Algeria depends on Algerian law.

What changes depending on your situation

• Your residence as defined in Article 4, which is not that of Article 4 B of the CGI.
• The nature of the income: dividend, interest, royalty, salary, pension.
• The direction of the flow: French or Algerian source, because the ceilings differ.
• The number of days spent in each state.
• The nature and location of your assets, for wealth and inheritance purposes.

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