France-Netherlands tax treaty: withholding taxes, nationality clause and exemption with progressive application

The convention of March 16, 1973, as amended by an addendum of April 7, 2004, caps the withholding tax on dividends at 5% (subject to the holding period, see below) or 15%, and that on interest at 10%. Royalties are taxable only in the country of residence. Capital gains on substantial shareholdings are subject to a nationality-related clause. The administrative list does not mention any inheritance or gift tax treaty with the Netherlands. This page presents what we have read in the text and explains what it does not cover.

A text from 1973, an amendment from 2004, and the MLI since 2020

The administrative list of conventions (BOI-ANNX-000306, dated April 29, 2026) classifies the convention as covering income and wealth, without mentioning inheritance or gifts. The current administrative guidance (BOI-INT-CVB-NLD) dates from June 2, 2016, before the implementation of the MLI (Minimum Tax on Income): read it with this caveat. The Dutch Ministry of Finance has published a summary text that incorporates the MLI. We do not reproduce its provisions, as they are found in this single source.

On the Dutch side, the convention mentions income tax, payroll tax, corporate tax, dividend tax, and wealth tax. On the French side, it mentions, in particular, income tax and corporate tax, as well as the business license tax (for Article 8) and withholding taxes and levies. The report appended to the draft budget law for 2027 deals separately with the "Caribbean Netherlands": this page concerns the 1973 convention.

Maximum deductions and key rules

Resident: a four-step tiebreaker

Article 4 defines a resident as a person liable to tax in a State by reason of their domicile, residence, place of management, or a similar criterion. For an individual resident in both States, paragraph 3 establishes, in order:

1. the State where she has a permanent home; if she has one in both, the one with which her personal and economic ties are closest (centre of vital interests); ;
2. in the absence of a determinable center of vital interests, or if she has no home, the State where she habitually resides; ;
3. then the State of which she is a national; ;
4. Finally, the agreement of the competent authorities.

For a legal entity, only the seat of effective management counts.

Dividends: 5 % or 15 %, and a holding period to be verified

Paragraph 1 of Article 10 makes dividends taxable in the beneficiary's state of residence. Paragraph 2 allows the source state to also tax them, at a maximum rate of 5 % for a company that directly holds at least 25 % of the share capital, and at a maximum of 15 % in all other cases. The BOFiP commentary specifies that a Dutch public limited company or limited liability company is covered, and that the condition is assessed at the time of payment.

Regarding the required detention period for the 5 % rate, the official documents we have consulted do not agree. The 2016 BOFiP commentary indicates that no detention period is stipulated in the convention. The Dutch summary text, which incorporates the MLI, refers, in our interpretation, to Article 8 of the multilateral convention, which specifies a period of 365 days. We are not taking a position between these two interpretations and are not publishing a specific duration: please verify with the official source before making any decision.

To obtain the treaty rate on a dividend from a French source, a resident of the Netherlands must prove their residence as defined in Article 4 and the absence of a permanent establishment in France to which the shareholding relates. The 2016 commentary describes form 5000, approved by the Dutch tax authorities, along with appendices 5001 (dividends), 5002 (interest), and 5003 (royalties).

Interest at 10 % and royalties without withholding

Article 11 makes interest taxable in the beneficiary's country of residence and caps the withholding tax at 10%. According to the BOFiP commentary, it excludes from withholding tax, in particular, interest on certain equipment sales credits, loans granted by a bank, and late payment penalties. The BOFiP adds that interest from Dutch sources is generally not taxed in the Netherlands.

Regarding royalties, Article 12 grants the right to tax only the state of residence. The commentary indicates that the Netherlands does not withhold taxes on these payments made to non-residents.

Capital gains: Article 13 and its nationality clause

Article 13 distinguishes three situations. Real estate, and shares in companies whose assets are primarily real estate, fall under the jurisdiction of the State where the property is located (§ 1). Property not covered elsewhere falls under the jurisdiction of the State of residence of the transferor (§ 4).

Paragraph 5 is specific to this text. Each state may tax gains on a "substantial interest" in a company resident therein, realized by an individual resident in the other state. Two additional conditions apply: the individual must be a national of the first state but not of the other, and must have been a resident of the first state at some point during the five years preceding the transfer. The text does not specify a percentage. Its application depends on your nationality, your successive residences, and the company in question.

Salaries: 183 days in the fiscal year

Wages are taxable in the State of residence, unless the employment is exercised in the other State (Article 15, paragraph 1). Paragraph 2 reserves taxation to the State of residence if three conditions are met: the stay in the other State does not exceed 183 days in total during the tax year in question, the remuneration is paid by an employer who is not a resident of that State, and the cost of the remuneration is not borne by a permanent establishment or fixed base of the employer there. The text refers to the tax year in question.

The attendance fees of a resident of the Netherlands who is a member of the board of a company resident in France are taxable in France (Article 16 § 1). For a professor, Article 20 provides an exemption for a period not exceeding two years.

Buildings and wealth

Income from real estate is taxable in the State where the property is located (Article 6). Article 23 (paragraphs 1 and 4) similarly distinguishes between real estate, which is taxable in the State where it is located, and other elements of wealth, which are taxable in the State of residence.

Avoiding double taxation: exemption with progressive rates on the French side

Article 24 B governs the French method. Income taxable in the Netherlands is exempt from French tax, except for income for which France grants a tax credit equal to the Dutch tax: income covered by Articles 8, 10, 11, 16, and 17, up to the limit of the corresponding French tax. Exempt income may be taken into account when determining the applicable tax rate. This mechanism is called progressive exemption.

Dividend of €200,000: numerical example (fictitious profile)

Situation. A fictitious Dutch company directly owns 30 % shares of a French company. It receives a dividend of €200,000. It also receives €40,000 in interest on a loan it granted, outside of a banking institution, to a French company.

Issue. She wants to know the withholding tax ceilings.

Strategy. It applies the ceilings of Article 10 § 2 (5 % or 15 %) and Article 11 § 2 (10 %). Direct ownership of 30 % exceeds the threshold of 25 %.

Result. Dividend cap: €10,000 at a rate of 5% of the % rate, compared to €30,000 at a rate of 15% of the % rate, a difference of €20,000. Interest cap: €4,000. These are caps, not amounts due. The 5% of the % rate remains subject to the holding period, which must be verified. The profile and amounts are fictitious.

Amicable procedure and exchange of information

Article 27 allows the taxpayer to appeal to the authority of their state of residence within three years of the first notification of the measure. Article 28 provides for the exchange of information between the authorities.

Inheritance and donations: no agreement in the administrative list

The scope of the convention is limited to income and wealth taxes (Article 2 § 1). The text read contains no clauses on inheritance or gifts, and the "Netherlands" line in the administrative list bears neither an "S" nor a "D" designation. The absence of these designations alone is not sufficient to establish that no convention exists: check with the relevant authorities. This page provides no information on Dutch inheritance law.

What this page does not cover

The following are not detailed here: Articles 5, 7, 8, 9, 14, 17, 19, 21, 25, 26 and 29 to 32; Article 24 A; paragraphs 3, 4 and 7 of Article 10; points II (Article 6) and III (Article 10) of the Protocol, as well as Protocol VI; the provisions of the MLI other than its effective date; the full text of the MLI.

What changes depending on your situation

• Your residence as defined in Article 4.
• The nature of the income: dividend, interest, salary, pension, rent.
• Your nationality, if you transfer a substantial stake.
• Direct or indirect ownership, and its duration.
• The location of your real estate.

An article should be read in light of the facts in your case. No results are promised.