The France-Canada tax treaty, point by point

The tax treaty between France and Canada was signed in Paris on May 2, 1975. It has been amended by three addenda (1987, 1995, 2010) and subsequently by the Multilateral Investment Convention (MIC), which has been in effect in France since 2020. Three rules are worth noting: pensions are taxable only in the country of origin; a country may, subject to conditions of nationality or length of residence, tax the capital gains of a former resident for up to five years; and French inheritance tax is only addressed in four articles. This page presents the information contained in the consolidated text.

A text from 1975, three amendments, the MLI in 2020

The official list of conventions (BOI-ANNX-000306, version of April 29, 2026) includes the convention of May 2, 1975, and its amendments of January 16, 1987, November 30, 1995, and February 2, 2010. It classifies it as covering income, wealth, inheritances, and gifts. The BOFiP (Official Bulletin of Public Finances) states that it entered into force on July 29, 1976.

The list of conventions modified by the MLI (BOI-ANNX-000511, of April 29, 2026) gives for Canada two effective dates in France: January 1, 2020 for taxes withheld at source, June 1, 2020 for other taxes.

Quebec appears on a separate line in the list (tax agreement of September 1, 1987, amendment of September 3, 2002). This agreement is not discussed here.

Maximum deductions and key rules

A ceiling is not a rate. French dividends paid to a non-resident individual are subject to a withholding tax of 12.80 % under domestic law (rate in effect as of January 1, 2026), "subject to more favorable provisions in tax treaties": the ceiling of 15 % is higher. The Canadian domestic tax rate on income paid to a non-resident was not consulted.

Who is a resident?

Article 4, paragraph 1, defines a resident as someone liable to taxation by virtue of their domicile or residence. Article 4, paragraph 2, categorizes a natural person resident in both States, in the following order: permanent home, then center of vital interests, habitual residence, nationality, and finally, the agreement of the competent authorities.

Pensions: the source state alone taxes them

Article 18, paragraph 1, stipulates that pensions and similar allowances paid in respect of previous employment are taxable only in the state from which they originate. Annuities follow the same principle (paragraph 3). For a pension from Canadian sources received by a resident of France, the article designates Canada. Its application to your pension, along with Article 23 below, must be examined on a case-by-case basis.

Capital gains: the five-year window of Article 13 § 5

The basic rule (Article 13 § 4) reserves the taxation of gains on most assets to the state of residence of the transferor. Two exceptions apply:

• Real estate buildings and companies. Gains on real estate are taxable in the State where they are located (§ 1 a). The same applies to gains on securities which derive more than 50% of their value from real estate located in that State, at any time of the 365 days preceding the transfer (§ 1 b).
• Former residents. By way of derogation from paragraph 4, a State may tax the gains of a natural person resident in the other State if that person possesses their own nationality or has been resident in that State for at least ten years before the transfer, and was resident there at any time during the five years immediately preceding the transfer (§ 5). The State that can tax is the one the person left.

Section 5 grants the right to tax. It does not state that the domestic law of France or Canada exercises this right, and the text read does not specify how the five-year period is calculated.

Inheritance and gifts: limited coverage

In the articles we consulted, we found no mention of a division of the right to tax inheritances. Article 2, paragraph 4, includes French inheritance tax among the taxes covered, "but only for the application of Articles 4, 23, 25, and 26." The BOFiP (Official Bulletin of Public Finances) states the same thing. The official list uses the letters S and D for Canada; it does not specify what these letters cover on an article-by-article basis.

Article 23 provides for deductions. For a deceased resident of Canada, French inheritance tax on property located in France is deducted from any tax otherwise owed in Canada (§ 1 c). For a deceased resident of France, France deducts from their inheritance tax the Canadian tax paid on certain taxable gains due to death, up to a certain limit (§ 2 c), which is not detailed here.

Wealth: Article 22 and the wealth tax

Article 22 reserves real estate and shares in predominantly real estate companies to the country where the property is located, requires a substantial shareholding (at least 25% of profits) in the country where the company is based, and reserves everything else to the country of residence. Paragraph 7 addresses the wealth tax: a French resident of Canadian nationality, but not of French nationality, has their assets located outside France excluded from the tax base for the five years following their arrival, and again after an interruption of residence of at least three years. The text does not mention the IFI (French real estate wealth tax): its application is not established.

Eliminating double taxation: the French credit under Article 23

Canada deducts French tax from its own tax on the same income (§ 1 a). France grants a tax credit (§ 2 a). For income under sections 10, 11, and 12, gains under sections 1 and 5 of section 13, and other listed categories, the credit is equal to the tax paid in Canada, but not exceeding the corresponding French tax. For other income, it is equal to the corresponding French tax.

What is unique about this text

• Taxes in question. Article 2, for Canada, refers to taxes "imposed by the Government of Canada under the Income Tax Act." The text read does not mention provincial taxes in this article. How the convention applies to your province's tax is a point that needs to be examined.
• Right to benefits. A benefit is denied if it is reasonable to conclude that one of the main objects of an arrangement or transaction was to obtain it, unless it is proven that the granting would be consistent with the object and purpose of the agreement.
• Retirement. Contributions to a pension scheme recognized in the other State are treated as those of a local scheme for a total of 60 months, subject to conditions (Article 29 § 5).
• Disputes and information. A case must be submitted to the amicable procedure within three years of the first notification of the measure (Article 25). Bank secrecy alone does not justify a refusal to exchange information (Article 26 § 5).

Five-year window of Article 13 § 5: numerical example (fictitious profile)

Situation. A fictional French entrepreneur leaves France on June 30, 2027 (the last day of his residency in France) to settle in Canada. He holds securities outside of real estate companies. Assumption: the five-year period begins five years to the day before the transfer.

Issue. He compares two transfer dates, May 15, 2032 and September 15, 2032, with regard to Article 13 § 5.

Strategy. He places his last date of residence in France within the five-year period preceding each transfer. The nationality requirement is met by assumption.

Result. Transfer of May 15, 2032: the period begins on May 15, 2027, and he was still a resident of France on June 30, 2027, i.e., 46 days later: the recent residence requirement is met, and France has the right to tax under Article 13 § 5. Transfer of September 15, 2032: the period begins on September 15, 2027, i.e., 77 days after his departure: the requirement is not met. This profile is fictitious and does not indicate whether domestic law applies to the exercise of the right to tax.

France-Canada Convention: What changes depending on your situation

• Your residence as defined in Article 4, on the date of the income.
• The nature of the income: dividend, interest, royalty, salary, pension, gain.
• Your nationality, years of residence and province, for Article 13 § 5 and for Quebec.

No result is guaranteed in advance.