The 1980 France-Hungary tax treaty, article by article

The convention between France and Hungary was signed in Paris on April 28, 1980, and entered into force on December 1, 1981. It covers taxes on income and capital. It has been amended by the Multilateral Convention (MLC) since January 1, 2022. Three features distinguish it: a refund of withholding tax for Hungarian residents, a separate regime for capital gains on shares of at least 25% of profits, and a French tax credit limited to income covered by Articles 10, 14, 16, and 17, with other income taxable in Hungary being exempt in France.

A text from 1980, the CML since 2022

According to the BOFiP doctrine (BOI-INT-CVB-HUN), a protocol forms an integral part of the convention, approved by law no. 81-749 of August 5, 1981 and published by decree no. 81-1229 of December 31, 1981. According to the BOFiP, article 30 sets the application to sums paid from December 1, 1981 for withholding taxes, to income earned or income relating to accounting periods ending from January 1, 1982 for other income taxes, and to taxable assets from January 1, 1982 for wealth.

The administrative list (BOI-ANNX-000306, dated April 29, 2026) classifies it as "IR – IF," without amendment, without remarks, and without mention of inheritance or gift. The list of conventions modified by the CML (BOI-ANNX-000511, same date) includes Hungary, with effects from January 1, 2022, for withholding taxes as well as other taxes. The tax authorities publish a consolidated version, which incorporates the CML in boxes and does not replace the authoritative texts. On the Hungarian side, the NAV table lists France on line "1980. IV. 28.", applicable from January 1, 1982, without a withholding rate.

Maximum deductions and key rules

Who is a resident?

According to Article 4 § 1, a resident is any person liable to tax in a State by reason of his domicile, residence, place of management or a similar criterion, excluding those who are taxed only on income from local sources or on capital situated there.

Paragraph 2 applies to an individual resident in both States. It takes into account, in order: a) the State of permanent home, then, if they have one in each, the State of their centre of vital interests; b) if this centre cannot be determined, or without a home in either State, the State of habitual residence; c) nationality; d) failing that, the agreement of the competent authorities.

Dividends: Withholding tax and Hungarian economic associations

Dividends are taxable in the recipient's country of residence (Article 10, paragraph 1). The country of the distributing company may also tax them, up to a limit of 5 % or 15 % (paragraph 2). The 25 % threshold applies to the capital of the company paying the dividends. Point 5 of the Protocol extends the 5 % rate to Hungarian economic associations with foreign participation constituted as collective companies.

Article 10, paragraph 5, addresses withholding tax: a Hungarian resident who receives dividends from a company resident in France may obtain a refund of the withholding tax paid by that company. This refund is taxable in France in accordance with paragraph 2.

Interest and royalties: Articles 11 and 12

Article 11, paragraph 1, states that interest arising in one State and paid to a resident of the other State "is taxable in that other State." It does not use the phrase "is taxable only" and does not set any ceiling at source. This page does not clarify whether the source State can also tax this interest: this should be verified in the consolidated text published on impots.gouv.fr before making any decision. Paragraph 3 overrides paragraph 1 if the claim relates to a permanent establishment or a fixed base in the source State. Paragraph 4 limits the article to the normal portion of interest in the case of special relationships.

Article 12 reserves royalties to the State of residence of the beneficial owner, with the same provisions regarding permanent establishments and special relationships. Point 3(b) of the Protocol treats royalties for industrial, commercial, or scientific equipment as business profits.

Capital gains: the participation of 25 % of profits

Article 13 distinguishes between real estate (§ 1), property of a permanent establishment or fixed base (§ 2), ships and aircraft in international traffic (§ 3) and all other property (§ 4, State of residence of the transferor).

Point 6 of the Protocol adds two exceptions. Gains on securities of a company that owns immovable property are taxable in the State where that property is located, if they are subject, under the laws of that State, to the same tax treatment as gains on immovable property. Notwithstanding paragraph 4, gains from the alienation of shares or units forming part of a substantial interest in a company are taxable in the State of residence of the company, according to its domestic law. A substantial interest exists when the transferor, alone or with associated or related persons, directly or indirectly holds securities entitling the holder to 25% or more of the company's profits. This threshold relates to profits, while that of Article 10 relates to capital.

Salaries, pensions, students and researchers

A resident's wages are taxable in their state of residence, unless the employment is exercised in the other state (Article 15 § 1). In that case, the 183-day exception in the table may make the state of residence solely competent, if the three conditions of Article 15 § 2 are met.

Pensions and other similar remuneration paid in respect of previous employment are taxable only in the State of residence (Article 18, paragraph 1). Pensions and other sums paid under social security legislation are taxable only in the State that pays them (Article 18, paragraph 2). Article 19 reserves public remuneration and pensions to the paying State. Article 18 does not mention annuities.

Article 20 exempts, in the host country, sums received from abroad by a student or trainee for their maintenance, studies, or training, without any time limit. Article 21 exempts teaching or research remuneration for up to two years, except for research conducted for a specific benefit to designated individuals.

Elimination of double taxation: Article 24

For a resident of France, income from Hungary under Articles 10, 14, 16, and 17 is taxed in France on its gross amount. The Hungarian tax paid entitles the resident to a tax credit, which cannot exceed the French tax due on this income. All other income taxable in Hungary is exempt from French tax, with tax calculated at the rate applicable to the total taxable income under French law.

On the Hungarian side, Article 24 § 1 provides for the exemption of income or assets taxable in France, with this income being taken into account when calculating the tax on the remaining amount. For dividends, Hungary grants a deduction equal to the tax paid in France, up to the corresponding portion of Hungarian tax.

Right to the benefits of the agreement

A section of the CML, entitled "Right to the Benefits of the Convention," reiterates Article 7 of the CML (main object test): a benefit may be refused under the conditions set out in that article. The CML has been in force since January 1, 2019, for France and since July 1, 2021, for Hungary.

Dividends of €10,000: a numerical example (fictitious profile)

Situation. Claire, a fictitious profile, is a resident of France and holds less than 25% of the capital of a Hungarian company. She receives €10,000 in gross dividends (assumed amount).

Issue. She wants to know the Hungarian tax ceiling and how this tax is treated in France.

Strategy. She reads Article 10 § 2 (15 % excluding company directly holding 25 % of the capital), then Article 24 § 2 b): French tax credit, capped at the relevant French tax.

Result. The standard limit is €1,500 (15 %s of €10,000), resulting in a net amount of €8,500. For a company directly holding at least 25 %s of the capital, the limit would be €500 (5 %s). In France, the credit is equal to the Hungarian tax actually paid, up to the amount of the corresponding French tax; this page does not calculate French tax.

What this page does not cover

It does not detail Articles 5, 7, 8, 9, 14, 16, 17, 25, 26, or point 8 of the protocol. The list of April 29, 2026, only includes the designation "IR – IF" for Hungary and does not indicate any inheritance or gift tax agreement; the existence of any other agreement is not examined here. Hungarian law is validated with a local professional.

What changes depending on your situation

• Your residence as defined in Article 4.
• The nature of the income: dividend, interest, gain, salary, pension.
• The percentage of capital and profits that you own.
• The location of the real estate.
• The date of perception, in view of the effects of the CML on January 1, 2022.

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