France-Mexico tax treaty: article by article, on income only

The tax treaty between France and Mexico was signed in Mexico City on November 7, 1991. It concerns income tax, not inheritance or gift tax. It caps French tax on dividends paid to a Mexican resident at 15 %, provided the dividend is not paid by a company holding at least 10 % of the share capital. It has been amended by the Multilateral Investment Convention (MLI) since January 1, 2024.

A 1991 convention, amended by the MLI since 2024

The convention entered into force on December 31, 1992, and applies in France from January 1, 1993 (BOFiP). The administrative list classifies it as follows: "C November 7, 1991", taxes concerned "IR".

It is amended by the multilateral convention signed in Paris on June 7, 2017. The list of amended conventions gives, for Mexico, January 1, 2024, as the date for taxes withheld at source, as for other countries. The BOFiP (Official Bulletin of Public Finances) on this convention dates from 2012 and predates the MLI (Multilateral Tax Agreement): this page follows the consolidated text.

This text contains a clause regarding the right to benefits: a benefit is not granted with respect to an item of income if one of the main purposes of the transaction was to obtain it. On the Mexican side, income tax law restricts treaty benefits to taxpayers who can prove their residency.

The taxes in question: income tax, not inheritance tax.

Article 2 addresses income tax and corporate tax in France. For Mexico, it addresses income tax and wealth tax. Inheritance and gift taxes are not included among the taxes covered, and the official list for Mexico only lists "IR" (income tax), without columns for inheritance or gift tax. Wealth tax is not mentioned in Article 2; this page makes no mention of its application to the French real estate wealth tax (IFI). Estates should be reviewed by a local professional.

Maximum deductions and key rules

Dividends: 15 %, 5 % and the threshold of 10 %

Paragraph 2(b) concerns dividends paid by a French resident company to a Mexican resident that is not a company holding at least 10 % of the share capital. These dividends are taxable in France, up to a limit of 15 % of the gross amount; the 10 % holding period is assessed over 365 days, including the date of payment. The tax authorities also indicate a levy of 12.80 % on dividends from a non-resident (rate as of January 1, 2026), "subject to more favorable provisions in tax treaties." The 15 % limit is a cap, not a rate; the internal rate of 12.80 % is lower.

Paragraph 2(a) adds a special case: if the company receiving the dividends is more than 50% owned by residents of third countries and is its beneficial owner, the tax of the distributor's country may not exceed 5% of the gross amount. Paragraph 2(b) applies notwithstanding the provisions of 2(a).

Interest, royalties: 15 % and three exemptions

For interest, the source state may tax up to 15 % of the gross amount (Article 11, paragraph 2). Paragraph 3 reserves taxation to the state of residence in three cases: the beneficiary is a state, a political subdivision, or a territorial collectivity; the interest is paid by such a person; or it remunerates a loan of at least three years granted or guaranteed by a public export financing or insurance institution. For royalties, the ceiling is also 15 % (Article 12, paragraph 2). Royalties for copyright on a literary, dramatic, musical, or artistic work (excluding films) fall under paragraph 3: they are taxable only in the beneficiary's state of residence, subject to the conditions of that paragraph.

Capital gains: real estate, the 365-day window, then the rest

Capital gains on real estate are taxable where the real estate is located (Article 13 § 1). Since the MLI, shares or rights in a company whose value is derived to the extent of more than 50% from real estate at any time during the 365 days preceding the transfer are taxable in the state where that property is located.

All other gains, including sales of securities unrelated to real estate, are taxable only in the seller's country of residence (§ 5). Exit tax upon leaving France is addressed on our page about leaving France.

Wages and self-employment: two 183-day windows

Article 15 designates the State of residence for salary purposes, unless the employment is carried out in the other State. It provides an exception: the stay in the other State does not exceed a total of 183 days "during any period of twelve consecutive months", the employer is not a resident of that State and the expense is not borne by a permanent establishment or fixed base.

Article 14, concerning self-employment, uses a different framework. Paragraph 1(b) stipulates a total duration "equal to or greater than 183 days during the relevant tax year." The time frame differs: a rolling twelve-month period on one hand, and a full tax year on the other. Read Article 14 in its entirety before any calculations; our page on the 183-day rule explains the method in detail.

Who is a resident?

For an individual resident in both States, Article 4, paragraph 2 applies the following criteria in order: permanent home; with a home in each State, the center of vital interests; failing that, habitual residence; then nationality; and finally, the amicable agreement of the authorities. According to the BOFiP (Official Bulletin of Public Finances), international law takes precedence over domestic law.

Pensions, public service, artists

Pensions paid for previous employment are taxable only in the recipient's state of residence (Article 18), with the exception of public service. For public service (Article 19, paragraph 1), remuneration and pensions paid by a state, subdivision, local authority, or public body are taxable only in that state. Artists and athletes are taxable in the state where they pursue their personal activities (Article 17, paragraph 1).

Eliminating double taxation: two tax credits

For a resident of France, Mexican-source income taxable in Mexico is taken into account for the calculation of French tax, with a tax credit applied against that tax (Article 21 § 1 a)). For income other than that referred to in (ii), it is equal to the corresponding French tax. For income referred to in particular in Articles 10, 11, and 12, it is equal to the tax paid in Mexico, without exceeding the corresponding French tax.

For a resident of Mexico, paragraph 2 a) allows a credit to be applied against Mexican tax equal to the tax paid in France, up to the limit of the Mexican tax corresponding to the income concerned.

Disputes and duration

The case of a taxpayer who has been incorrectly taxed must be submitted to the competent authority "within three years of the first notification of the measure" (Article 23). The agreement is concluded for an unlimited duration; termination is possible from the fifth calendar year following its entry into force, with at least six months' notice (Article 28).

Withholding tax on dividends between France and Mexico: a numerical example (fictitious profile)

Situation. Camille, a resident of Mexico (fictitious profile), owns 3,% of the capital of a French company. She receives €20,000 in gross dividends.

Issue. She wants to know if the French withholding can reach the ceiling of 15 % of article 10 § 2 b).

Strategy. It compares the internal rate of 12.80 % applicable to a non-resident with the conventional ceiling, after verifying that it is not a company holding at least 10 % of the capital.

Result. The withholding tax at 12.80 % amounts to €2,560. The 15 % threshold would represent €3,000: the withholding tax remains €440 below this threshold. The amount received before Mexican tax is €17,440. Mexican tax is not calculated, as the tax schedule was not read at source; the credit under Article 21 § 2 a) is limited to the corresponding Mexican tax. The holding of 3 % is a hypothetical situation.

France-Mexico Convention: What changes depending on your situation

• Your residence as defined in Article 4, if you have links with both countries.
• The nature of the income: dividend, interest, royalty, gain, pension, salary.
• Your status as an individual or a company, and your share of the capital.
• The nature of the asset transferred: building, real estate-focused company, other security.
• The calculation of your days, according to article 14 or 15.
• The effects of MLI, including the entitlement to benefits clause.

The agreement is read in light of the facts of your case; no outcome is guaranteed.

What this page does not cover

Neither Mexican tax itself, nor inheritances, nor the IFI, nor paragraphs 4 and 5 of article 10, nor articles 16 and 20, nor the residency certification procedures.