The France-Kuwait tax treaty: what the text says

The Franco-Kuwaiti convention, signed in Kuwait on February 7, 1982, and in force since September 1, 1983, covers income, wealth, and inheritances. For dividends, interest, and royalties, the agreement does not specify a withholding tax rate. France eliminates double taxation through a capped tax credit.

Four texts, no changes by the MLI

The 1982 text was extended by an exchange of letters dated August 17 and October 18, 1988, and subsequently amended by two addenda: September 27, 1989 (effective July 1, 1991) and January 27, 1994 (effective March 1, 1995). The list of April 29, 2026 (BOI-ANNX-000306, agreements in force as of January 1, 2026) indicates "IR – IF – S". Kuwait has no entry in the list of conventions amended by the MLI (BOI-ANNX-000511, same date).

Dividends, interest, royalties: no percentages are mentioned in the text.

Article 8, paragraph 1 (dividends) and Article 9, paragraph 1 (interest) stipulate that dividends and interest "are taxable only in that other State" if the resident of that State is the beneficial owner. Article 8, paragraph 2, allows a resident of Kuwait receiving dividends from a company resident in France to obtain a refund of the withholding tax, to the extent that the company has paid it. For royalties, Article 10, paragraph 1, provides a different approach: the State of source only taxes if the right or property is attributable to a permanent establishment or a fixed base situated therein.

Capital gains: a threshold of 25 % of profits

Article 11 distinguishes three cases. Capital gains on real estate are taxable where the property is located (§ 1 a). Capital gains on shares of a company whose assets are primarily real estate follow the same logic, if that state subjects them to the same tax regime (§ 1 b). Other assets fall under the jurisdiction of the state of the transferor (§ 2). § 3 makes an exception: shares representing a substantial ownership interest are taxable in the state of the company, provided they entitle the holder to "25% or more of the company's profits.".

Wealth and inheritance: real estate remains in its place

Article 16 B § 1 makes real estate taxable in the country where it is located if its value exceeds the total value of certain shares and receivables held by the resident. The BOFiP tax doctrine (¶ 30 and 40, version of 12/09/2012) interprets this text as an exemption from wealth tax for Kuwaiti residents holding French real estate whose value is less than their movable assets held in Kuwait. § 3 establishes the general rule: wealth is taxable only in the country of residence. For inheritances (Article 17), real estate is taxed where it is located (§ 1); movable property, including securities and deposits, is taxed only in the country of residence of the deceased at the time of death (§ 3).

Maximum deductions and key rules

Residence and public functions

In cases of dual residence, Article 4 prioritizes, in order, the permanent home (then the center of vital interests), the habitual residence, nationality, and finally, the agreement of the authorities. Article 14 reserves public salaries and pensions to the paying State, with two exceptions: the person is a national of the other State or resided there before rendering services, which were performed in that other State; or the services relate to an industrial or commercial activity of a State or one of its entities.

Double taxation: tax credit, not exemption

According to Article 19 § 2 a, income from Kuwait and taxable in Kuwait is also taxable in France; the resident of France obtains a credit equal to the tax paid in Kuwait, which "may not, however, exceed the amount of French tax corresponding to this income".

What this page does not cover

The other articles, the protocol, and the denunciation are not detailed, nor is the application of Article 16 B to the real estate wealth tax (IFI). Kuwaiti law is not addressed: its validity is determined by consulting a local professional.

Typical case (fictitious profile)

A French resident executive is considering selling shares in a Kuwaiti company. Everything depends on the size of the share: below 25% of profits, the gain falls under the jurisdiction of the seller's state (Article 11 § 2); at 25% or more, the company's state may tax it (Article 11 § 3). No amount is calculated, as the Kuwaiti tax rate is not relevant here.