The 1996 France-Mongolia convention is modified by the multilateral convention (MLI), the effects of which in France begin on January 1, 2025 for withholding taxes and on July 1, 2025 for other taxes.
A text from 1996, the MLI since 2025
Signed in Paris on April 18, 1996 with a protocol which forms an integral part thereof, the convention entered into force on December 1, 1998 and applies to income from January 1, 1999. The BOI-ANNX-000306 list (April 29, 2026) classifies it among those which concern income and wealth.
Mongolia signed the MLI on October 6, 2022; it has been in force for Mongolia since January 1, 2025 (for France, January 1, 2019). List BOI-ANNX-000511 (column "Effective Date in France") sets the effective dates as January 1, 2025 for withholding taxes and July 1, 2025 for other taxes (note 11 of the consolidated text: taxable event for withholding taxes, start of the tax period for other taxes). The consolidated text adds, before Article 1, a clause addressing the benefit whose granting was one of the main objectives of an arrangement or transaction.
Maximum deductions and key rules
| Subject | Article | Written rule |
|---|---|---|
| Dividends | 10 § 2 | 5 % of the gross amount if the beneficiary is a company holding at least 10 % of the capital for 365 days including the day of payment; 15 % in other cases |
| Interests | 11 § 2 | 10 % of crude |
| Royalties | 12 § 2 and § 3 | 5 % of the gross; copyright reserved to the State of residence |
| Stock gains | 13 | Taxable in the other State if, over the 365 days preceding the transfer, more than 50% of the value is derived from real estate located in that State (similar rights or interests covered; real estate used for the company's own business excluded) |
| Self-employed professions | 14 § 1 b) | Taxation may be levied in the other state if the stay exceeds 183 days during the tax year. |
| Wages | 15 § 2 a) | Exception: stay of no more than 183 days during the tax year, non-resident employer, expense not borne by a permanent establishment |
| Fortune | 22 | Buildings: where they are located; permanent establishment: State of establishment; other elements: State of residence |
183 days: the fiscal year, not twelve rolling months
For wages and self-employment, days are counted over the fiscal year in question (Mongolian definition not addressed here).
Residence and wealth
Article 4 § 2 distinguishes between natural persons resident in both States: permanent home, center of vital interests, habitual residence, nationality, then agreement of the authorities.
For wealth (article 22, see table), the text cites the solidarity tax on wealth (article 2 § 3); its application to the real estate wealth tax is not established by the sources read.
Eliminating double taxation: a clause for Mongolian incentives
Article 23 provides for a tax credit in France, up to the amount of French tax corresponding to this income (§ 1 a). Mongolia grants a credit for French tax. Mongolian tax incentives are protected for 10 years "from the date of entry into force of the Convention," renewable by mutual agreement (§ 1 d) iii). Possible extension and expiry date: not read, to be verified in the text.
Typical case (fictitious profile)
Situation. A resident of France, fictitious profile, receives from Mongolia €40,000 in gross dividends (without participation of 10 %), €12,000 in gross interest and €25,000 in gross royalties.
Issue. He is seeking the maximum amount that Mongolia can extract at the source.
Strategy. It applies articles 10, 11 and 12.
Result. €6,000 on dividends (15 %), €1,200 on interest (10 %) and €1,250 on royalties (5 %), for a maximum of €8,450. This total is a maximum, not the tax due.
What this page does not cover
Mongolian tax rates, interest exemptions (Article 11), the mutual agreement procedure, and the exchange of information are not addressed. The list does not include any text on inheritance.
What changes depending on your situation
- Your residence as defined in the convention, and the nature of the income: its triggering event or its tax period, with regard to the effective dates of the MLI.
- The percentage and duration of capital ownership.
- The days spent in each state during the fiscal year.
An article should be read in light of the facts in your case, and no result is guaranteed in advance.
Frequently asked questions
What is the withholding tax rate on royalties between France and Mongolia?
Article 12 § 2 caps the tax of the State of source at 5 % of the gross amount of royalties.
Does the MLI modify the France-Mongolia convention?
Yes. Its effects in France begin on January 1, 2025 (withholding taxes) and on July 1, 2025 (other taxes), according to the list of April 29, 2026.
Take stock of your situation
Balmont Conseil, a firm based in Lyon for almost 14 years, advises executives and families whose assets or business activities have ties to France and Mongolia. To discuss your situation, please schedule an appointment.
Alexis SagnierFinancial and real estate investment advisor, insurance broker, AMF certified
Founder of Balmont Conseil, Lyon (ORIAS 13003497)
Read also
- Leaving France: exit tax, tax residence, procedures
- French tax residence: the 3 criteria (art. 4 B)
- 183-day rule: employees on assignment and agreements
- Double taxation: tax credit and effective tax rate
- Dividends paid to a non-resident: withholding tax of 12.8% %
- Wealth tax for non-residents: taxable assets and the €1.3 million threshold
Official sources
- Consolidated text of the convention as amended by the MLI: https://www.impots.gouv.fr/sites/default/files/media/10_conventions/mongolie/nid_28291_mongolie_consilidee_cml.pdf
- BOFiP doctrine, France-Mongolia convention (BOI-INT-CVB-MNG): https://bofip.impots.gouv.fr/doctrine/BOI-INT-CVB-MNG
- List of tax treaties (BOI-ANNX-000306): https://bofip.impots.gouv.fr/bofip/2509-PGP.html/identifiant=BOI-ANNX-000306-20260429
- List of agreements modified by the MLI (BOI-ANNX-000511): https://bofip.impots.gouv.fr/bofip/14854-PGP.html/identifiant=BOI-ANNX-000511-20260429
