The 2003 France-Czech Republic tax treaty, article by article

France and the Czech Republic signed their convention on April 28, 2003; it has been in force since July 1, 2005. It caps the withholding tax on dividends at 10% of the capital, and at 0% for a company that directly holds at least 25% of the capital. Interest is taxable only in the beneficiary's country of residence. Royalties are capped at 5% or 10% depending on their nature. The official tax schedule classifies it as income and wealth tax, excluding inheritance and gift tax. This page presents the articles included in the official consolidated text and explains what it does not cover.

A text from 2003, modified by the MLI since 2021

The BOFiP indicates an entry into force of 1 July 2005, an authorization by law no. 2005-226 of 14 March 2005 and a publication by decree no. 2005-890 of 27 July 2005. The Czech Ministry of Finance gives the same entry into force date.

The convention is amended by the Multilateral Convention (MLI) signed on June 7, 2017, which entered into force on January 1, 2019, for France and on September 1, 2020, for the Czech Republic. Its effects began on January 1, 2021, for withholding taxes and for periods beginning on or after March 1, 2021, for other taxes. The administrative list of April 29, 2026, does not include any suspension notices for the Czech Republic.

Article 29 terminated the application of the 1973 convention with Czechoslovakia. Article 30 allows for the termination of the agreement after five calendar years, with at least six months' notice before the end of a calendar year.

Maximum deductions and key rules

Who is a resident: Article 4

A person is considered a resident if they are liable to tax in a State by reason of their domicile, residence, place of management, or a similar criterion. If an individual is a resident of both States, paragraph 2 considers, in order of priority: their permanent home; if they have one in each State, their center of vital interests; their habitual abode; their nationality; and finally, the agreement of the competent authorities. For a person other than an individual, it is their place of effective management.

Taxes concerned: wealth tax is one of them

Article 2 lists, for France, income tax, corporation tax, payroll tax, and wealth tax. For the Czech Republic, it lists personal income tax, corporation tax, and real estate tax. Its application to the French wealth tax (IFI) is not addressed here.

Dividends: everything hinges on the 25% capital threshold.

Paragraph 2 of Article 10 stipulates a limit of 0 % if the beneficial owner is a company that directly holds at least 25 % of the capital of the paying company. In all other cases, including for an individual, the limit is 10 % of the gross amount. We have not found a minimum holding period specified in this article; the full text should be reviewed.

Interest: taxable only in the beneficiary's state of residence

Article 11 reserves the taxation of interest to the State of residence of the beneficial owner. Paragraph 3 sets aside this rule if the beneficiary carries on business in the other State through a permanent establishment or fixed base, and the claim is attributable thereto: Article 7 or 14 then applies.

Royalties: 5 % or 10 %, and one excluded category

Article 12 initially assigns taxation to the recipient's state. The source state may also impose a tax, with a ceiling of 5 % of the gross amount for the use of industrial, commercial, or scientific equipment, and 10 % for patents, trademarks, designs, plans, secret formulas or processes, software, and know-how. Literary, artistic, or scientific copyrights, excluding software, are exempt from this withholding tax.

Capital gains: the 50 % threshold for real estate companies

Gains from real estate situated in the other State are taxable in that State, as are gains from shares or rights in a company, other than one listed on a regulated market, whose assets or value are derived, to the extent of more than 50%, from real estate situated in that State, either directly or through other companies. Real estate used by the company for its own business purposes is not included. All other gains are taxable only in the State of residence of the transferor (Article 13, paragraph 4).

Salaries, tokens, pensions

For salaries, Article 15, paragraph 2, exempts stays in the other State not exceeding a total of 183 days during any twelve-month period beginning or ending in the tax year in question. Two other conditions apply: the employer must be a non-resident of the other State, and the remuneration must not be borne by a permanent establishment or fixed base. Directors' fees are taxable in the State of the company that pays them. Pensions for previous employment are taxable in the State of residence; public salaries are taxable in the State that pays them, except in cases of nationality (Articles 18 and 19).

Wealth: Article 22

Article 22 allocates wealth taxation. Real estate is taxable in the State where it is located, as are shares in companies with more than 50% real estate holdings, excluding operating properties. The assets of a permanent establishment or fixed base are taxable in the State where they are situated. Ships, boats, and aircraft operated in international traffic are taxable only in the State of the place of effective management; other assets are taxable only in the State of residence. For securities, companies listed on a regulated market and operating properties are excluded, as in Article 13.

Double taxation: the French tax credit under Article 23

For France, income taxable in the Czech Republic is taken into account when calculating French tax, which is not reduced by Czech tax: the French resident receives a tax credit. For most income, this credit is equal to the corresponding French tax, provided the resident is subject to Czech tax on that income. For dividends, royalties, capital gains, and other listed income, the credit is equal to the Czech tax paid, capped at the corresponding French tax. Wealth taxable in the Czech Republic also grants a similar credit. The Czech Republic allows a deduction equal to the tax paid in France, up to the corresponding portion of the Czech tax.

Dividends at 24 % or 25 % of capital: numerical example (fictitious profile)

Situation. A French company, fictitious profile, directly owns 24 % of the capital of a Czech company, which pays it a gross dividend of €200,000.

Issue. She wants to know the Czech detention ceiling.

Strategy. She reads article 10 § 2: 0 % from 25 % of direct ownership of capital, 10 % in other cases.

Result. At 24 %, the limit is 10 %, or €20,000. At 25 %, it would be 0 %, or €0. Therefore, one holding point changes the €20,000 limit. This calculation does not take into account Czech domestic tax, the MLI clause on the principal purpose of the arrangements, or French dividend taxation. The amounts and percentages are fictitious.

Disputes and anti-abuse clause

Article 25 requires that the case be submitted within three years of the first notification of the measure. The consolidated version reproduces the MLI clause: a benefit is not granted if it is reasonable to conclude that its granting was one of the principal purposes of an arrangement or transaction.

Inheritance and gifts

The administrative list classifies the Czech Republic for income and wealth tax purposes, without mentioning inheritance or gifts. This page provides no further information: inheritance and gifts are governed by both French and Czech law.

What this page does not cover

Articles 5, 7, 8, 9, 14, 17, 20, 24, 26 to 28, the application of the treaty to the French wealth tax (IFI), and Czech domestic law (tax residency, tax brackets, dividend rates, property tax): the Czech tax authorities' websites we consulted do not address these points. Have these matters verified with a Czech professional.

What changes depending on your situation

• Your residence as defined in Article 4.
• The nature of the income: dividend, interest, royalty, salary, pension, gain.
• Your status as an individual or a company, and the share held directly in the capital.
• The number of days spent in the Czech Republic in each twelve-month period.
• The real estate composition of the companies in which you hold shares.

An article should be read in light of the facts in your case. No outcome is guaranteed.