The France-Philippines tax treaty: a review of the main articles

The France-Philippines convention, dated January 9, 1976, concerns income taxes (Article 2). In the administrative list, the column "Taxes Covered and Specifics" only contains the abbreviation IR, without the abbreviations IF, S, or D. It caps dividends at 10 or 15 %, interest at 15 %, and royalties at 15 %. It establishes two different stay thresholds: 120 days for the self-employed and 183 days for salaried employees.

This page reads the consolidated text published by the French administration, which incorporates the 1995 and 2011 amendments, and the BOFiP doctrine. It does not detail Philippine law.

A 1976 text, two amendments, no line in the MLI list

The convention. Signed on January 9, 1976, it came into force on August 24, 1978.

The first amendment. Signed in Paris on June 26, 1995, it entered into force on March 31, 1998.

The second amendment. Signed on November 25, 2011, it came into force on February 1, 2013. It replaces Article 26 on the exchange of information and applies to any calendar year or accounting period beginning on or after January 1, 2012.

The MLI. The administrative list of conventions amended by the multilateral convention, in its version of April 29, 2026, does not contain an entry for the Philippines. This page draws no conclusions from this.

The taxes in question (Article 2). In France, income tax, corporate tax, and payroll tax. In the Philippines, income tax under the Tax Code and stock market transaction tax.

Maximum deductions and key rules

Who is a resident? Article 4

If a natural person is resident in both States, the convention applies, in order: permanent home, center of vital interests, habitual residence, nationality, and then the agreement of the competent authorities. A legal entity is subject to the jurisdiction of the place of its effective management.

Dividends: the criterion is voting rights

Dividends are taxable in the recipient's country of residence. The country of the paying company may also tax them. Article 10, paragraph 2, caps the tax at 10% of gross income when the beneficial owner is a company (excluding partnerships) that directly holds at least 10% of the voting rights. In all other cases, the cap is 15%. Therefore, an individual is subject to the 15% rate.

The cap does not apply to corporate income tax used to pay dividends. It does not apply if the beneficiary carries on business in the company's state through a permanent establishment or fixed base, and the shareholding is effectively connected with that establishment or base.

Interests: a ceiling of 15 % and several special cases

The source state may tax interest up to a limit of 15 %. The text provides for three exceptions. Interest on securities issued by one of the states, its subdivisions, or its local authorities is taxable only in the state of residence of the beneficiary. This is also the case for interest on loans or credits covered by BFCE or Coface (French Export Credit Agency) on the French side, and by the Central Bank of the Philippines or a designated credit institution approved by exchange of letters on the Philippine side. Finally, the Philippine tax on interest from bonds or similar securities publicly issued by a Philippine company and paid to a resident of France may not exceed 10 % of the gross amount.

Late payment penalties are not considered interest within the meaning of the convention.

Royalties: 15 %, on a broad list

Royalties are taxable in the state of residence, and the state of source may tax them up to 15% of the gross amount. The definition covers copyrights, including films and works broadcast on radio or television, patents, trademarks, designs, plans, secret formulas or processes, industrial, commercial, or scientific equipment, and information related to industrial, commercial, or scientific experience. If the right is attributable to a permanent establishment or fixed base, the rules for business profits or self-employment apply.

Two length-of-stay thresholds, two reference periods

The convention uses two different thresholds.

Self-employed professions (article 14). Income from a liberal profession or self-employment is taxable in the other state if the taxpayer has a fixed base there, or if their stay there reaches 120 days "during the calendar year." This threshold is a minimum, not a maximum: at 120 days, the other state can tax the portion of the income attributable to it.

Employees (Article 15). The exception to taxation in the State of employment applies if three conditions are met: a stay that does not exceed a total of 183 days "during the tax year concerned", an employer who is not a resident of the other State, and an expense not borne by a permanent establishment or a fixed base of the employer.

The two thresholds are not measured over the same period: the calendar year on one hand, the fiscal year on the other. Artists and athletes fall under Article 17, without a minimum number of days: they are taxable in the state where they perform their duties.

Pensions: a Philippine exception

Private pensions are taxable only in the state of residence. An exception applies to pensions from Philippine company plans not registered under Philippine law: these remain taxable in the Philippines. Social security pensions are taxable only in the state that pays them. Public salaries and pensions are taxable in the paying state (Article 19, paragraphs 1(a) and 2), with the exception in paragraph 1(b): services rendered in the state of residence of the recipient, who did not become a resident there solely for the purpose of rendering those services.

Real estate and capital gains

Capital gains on real estate are taxable in the state where the property is located. Capital gains on movable property of a permanent establishment or fixed base are taxable in the other state (Article 13, paragraph 2), as are capital gains on ships and aircraft operated in international traffic in the state where the enterprise is located. Capital gains on other property are taxable only in the state of which the transferor is resident (Article 13, paragraph 3).

Eliminating double taxation: Article 23

France exempts income taxable in the Philippines under the convention, except for income listed in paragraph (b), which specifically refers to Article 6 § 5, Article 8, and Articles 10, 11, and 12 (full list in the text). For these latter items, Philippine tax entitles the taxpayer to a tax credit, capped at the corresponding French tax. Paragraph (c) provides for a flat-rate credit for income covered by Articles 10, 11, and 12: the higher of the Philippine tax actually collected, or 20 % of the gross amount (Articles 10 and 12), or 15 % (Article 11), without exceeding the French tax on this income. According to the text, this flat-rate credit applies only for ten years after the entry into force of the 1995 amendment, a period that may be extended by agreement of the competent authorities; otherwise, the credit in paragraph (b) applies. This page does not calculate these dates and does not determine the applicable tax regime today; this can be verified in the text. France calculates its tax at the rate corresponding to the total taxable income. A specific procedure allows for appeals to the competent French authority when the Philippine tax on interest and royalties exceeds these limits. The Philippines, for its part, grants a tax credit for the French tax.

Inheritance and gifts: the convention does not address these.

Article 2 only concerns income taxes. In the administrative list (BOI-ANNX-000306), the column "Taxes covered and specificities" only contains the abbreviation IR for the Philippines; no abbreviations IF, S or D appear there.

Other articles and what this page does not cover

Article 24 prohibits discrimination based on nationality and protects permanent establishments. Article 25 establishes the amicable procedure: the request must be submitted within two years of the first notification of the measure. Article 26, as amended in 2011, governs the exchange of information, and banking secrecy does not allow for refusal of this exchange.

This page does not detail the protocol, the articles on business profits, articles 16, 20 to 22, nor the application of the convention to the IFI.

Your days in the Philippines and your dividends: a numerical example (fictitious profile)

Situation. A consultant residing in France (fictitious profile) works as a freelancer and spends 130 days in the Philippines during the calendar year (hypothetical). A French company (fictitious profile) directly holds 20% of the voting rights in a Philippine company that pays it €150,000 in gross dividends.

Issue. The consultant is wondering if the Philippines can tax her income from this activity. The company wants to know the maximum withholding tax.

Strategy. The consultant compares her 130 days to the 120-day threshold of Article 14, and then, by comparison, to the 183-day threshold of Article 15, which applies to employees. The company applies Article 10, paragraph 2.

Result. With 130 days, the 120-day threshold is reached, exceeding it by 10 days: Article 14 allows taxation in the other state for the attributable portion of the income. The same number of days would remain 53 days below the 183-day threshold applicable to an employee, subject to the other two conditions. The Philippine withholding tax cannot exceed €15,000 for 10 %, compared to €22,500 for 15 %, a difference of €7,500.

This profile is fictitious. The calculations do not take into account Philippine taxation or the French taxation of the consultant or the company. No results are guaranteed, and Philippine law should be verified with local counsel.