The France-South Korea tax treaty, article by article

The convention between France and South Korea was signed in Paris on June 19, 1979, and has been in force since February 1, 1981. An amendment dated April 9, 1991, supplemented it, and the multilateral convention (MLI) has been in effect since 2021. It caps withholding tax at 10% or 15% on dividends, at 10% on interest (except in the cases specified in Article 11, paragraph 3), and at 10% on royalties. This page reads the official text and explains what it does not cover.

A text from 1979, an amendment from 1991, and the MLI since 2021

The convention. Signed in Paris on June 19, 1979 with a protocol which forms part of it, it entered into force on February 1, 1981. The administrative list of conventions (BOI-ANNX-000306, of April 29, 2026) classifies it as "IR", income tax, and makes no mention of inheritance or gift.

The amendment of April 9, 1991. It came into force on March 1, 1992, with effect for withholdings at source from that date. Article 9 abolished a mechanism described below: the flat-rate tax credit of 20 %.

The MLI. List BOI-ANNX-000511 (April 29, 2026) gives, for South Korea, January 1, 2021 for taxes withheld at source and March 1, 2021 for other taxes. The consolidated text indicates that the multilateral convention, signed in Paris on June 7, 2017, entered into force on January 1, 2019 for France and on September 1, 2020 for Korea. Its provisions appear in boxes.

Maximum deductions and key rules

The taxes in question: the tax on residents

For France, the convention covers income tax and corporate tax. For Korea, it covers income tax, corporate tax, and inhabitant tax. It also applies to taxes of the same or similar nature (Article 2, paragraph 2). The text makes no mention of wealth tax or real estate wealth tax.

Who is a resident? Four steps, nationality in third position

Article 4 § 2 determines the appropriate status for a natural person resident in both States. The criteria apply in this order.

1. The state where she has a permanent home; if she has one in both, the one where her closest personal and economic ties are located (centre of vital interests).
2. If the center of vital interests cannot be determined, or if she has no permanent home in any State: the State where she habitually resides.
3. If she habitually resides in both States, or in neither: the State of which she is a national.
4. If she has the nationality of both States or of neither: the competent authorities decide by mutual agreement.

Nationality therefore only comes into play after home, center of vital interests and habitual residence.

Dividends: 10 % or 15 %, and 5 % on branches

Withholding tax may not exceed 10% of the gross amount of dividends if the beneficial owner is a company (other than a partnership) that directly holds at least 10% of the capital of the paying company (Article 10, paragraph 2(a)). It may not exceed 15% in all other cases (paragraph 2(b)). Paragraph 7 concerns tax on the profits of branches: after being subject to corporate income tax, the profits of the permanent establishment may be subject to tax at a rate not exceeding 5%.

Interest and royalties: 10 % each

Article 11 caps the withholding tax at 10% of the interest amount. Paragraph 3 waives this cap in three cases, where the interest is taxable only in the beneficiary's state of residence: a) interest on a bond issued by a state, one of its subdivisions, or local authorities, if a resident of the other state is the beneficial owner; b) interest on loans or credits "made or guaranteed" by designated public institutions (for Korea, the Bank of Korea and the Export-Import Bank of Korea; for France, the Bank of France and the French Foreign Trade Bank); c) interest paid in connection with the sale on credit of industrial, commercial, or scientific equipment, or of goods between businesses. The exact conditions are set out in the text. Article 12 caps the tax at 10% of the gross amount of royalties.

Capital gains: the 25% profit threshold

Income and gains from real estate are taxable in the state where the property is located (Articles 6 § 1 and 13 § 1). Article 13 § 1 also covers shares in real estate companies, whether jointly owned or whose assets consist primarily of real estate; its exact wording should be reviewed in the text. Gains on shares or units that form part of a substantial interest are taxable in the state of residence of the company. The text defines this interest as securities entitling the holder to 25% or more of the company's profits, held by the transferor alone or with related or associated persons, directly or indirectly. It does not specify a holding period. Gains from other assets are taxable only in the state of which the transferor is resident (Article 13 § 4).

Wages, pensions and social security

The exception in Article 15(2)(a) requires that the beneficiary reside in the other State for a period or periods not exceeding a total of 183 days. The reference period and other conditions are specified in the text before any calculations are made.

Pensions and similar remuneration paid to a resident in respect of previous employment are taxable only in the State of residence, subject to Article 19 § 2 (Article 18 § 1). Pensions paid under the social security legislation of a State are taxable in that State (Article 18 § 2).

Eliminating double taxation: Article 23 and the end of the flat-rate tax credit

French side. Korean tax is not deductible from taxable income in France. For income from articles 10 (dividends), 11 (interest), 12 (royalties), 13, 14, 16 and 17, the French tax credit is equal to the amount of tax paid in Korea in accordance with these articles, without exceeding the amount of French tax corresponding to this income.

The lump-sum credit of 20 %. The tax authorities note that the 1979 convention granted a flat-rate tax credit of 20 % on dividends, interest, and royalties of Korean origin paid to residents of France. Article 9 of the 1991 amendment eliminated this credit, effective March 1, 1992: for amounts paid since that date, the credit is equal to the Korean tax paid, up to the limit of the corresponding French tax.

Korean side. Korea grants a resident of Korea a credit for French tax paid, capped at the proportional Korean tax (Article 23 § 1).

What this page does not cover

The 183-day reference period, the civil service (Article 19), non-discrimination (Article 24), corporate profits, and the amicable settlement procedure are not detailed. Korean domestic law is not addressed. The administrative list does not mention any inheritance or gift agreements with South Korea; this page derives no rules from them.

Participation of 12 % and a dividend of €50,000: numerical example (fictitious profile)

Situation. A fictitious French company directly holds 12,% of the capital of a Korean company, which pays it €50,000 in gross dividends. A French resident individual shareholder also receives €20,000 in gross dividends from another Korean company.

Issue. We need to measure the withholding ceiling applicable to each individual, and what remains deductible in France.

Strategy. The company applies the ceiling of Article 10 § 2 a) (10 %) and the partner that of § 2 b) (15 %). The French tax credit is then limited to the corresponding French tax.

Result. For the company, the maximum withholding tax is €5,000, compared to €7,500 in other cases: the difference is €2,500. For the shareholder, the maximum withholding tax is €3,000. If the French tax corresponding to these dividends is €2,400 (a hypothetical scenario), the tax credit is €2,400, and €600 of the withholding tax is not deductible. A transfer of shares representing 27% of the profits of a Korean company exceeds the 25% threshold of Article 13 § 3 by 2 percentage points. The amounts and profiles are hypothetical.

What changes depending on your situation

• Your residence as defined in the convention, and the tie-breaking stage that concerns you.
• The nature of the income: dividend, interest, royalty, pension from a previous job or social security pension, capital gain.
• Your holding level: 10 % of capital for the 10 % dividend ceiling, 25 % of profits for substantial participation.
• The number of days spent in each state.
• Korean law, to be validated with a local professional.

An article should be read in light of the facts in your case, and no result is guaranteed in advance.