The France-Vietnam tax treaty: a 1993 text without an article on interest

The tax treaty between France and Vietnam was signed in Hanoi on February 10, 1993, and has been in force since July 1, 1994. It deals with income and wealth taxes. Three features distinguish it: it contains no article on interest, the administrative list does not include any inheritance or gift tax treaties, and the withholding tax rate on dividends from Vietnamese sources is interpreted in two ways.

A text from 1993, modified by the MLI since 2024

The convention was approved by Law No. 94-323 of April 25, 1994, and published by Decree No. 94-1101 of December 13, 1994. A protocol forms part of it. The administrative list of conventions classifies it under the heading "IR – IF": income tax and wealth tax (BOI-ANNX-000306, of April 29, 2026).

It is also modified by the multilateral convention (MLI). The administrative list (BOI-ANNX-000511, dated April 29, 2026) gives, for Vietnam, January 1, 2024 for taxes withheld at source and March 1, 2024 for other taxes. The consolidated text specifies that other Vietnamese taxes are concerned for tax periods beginning on or after January 1, 2025. It reproduces the principal purpose clause: a benefit is denied if one of the principal purposes of an arrangement was to obtain it, unless it conforms to the object and purpose of the convention.

Maximum deductions and key rules

Who is a resident?

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 2 applies, in order: a) the permanent home, or failing that, the center of vital interests; b) the habitual abode; c) nationality; d) failing that, the agreement of the competent authorities.

This conventional notion prevails, in the case of dual residence, over the tax domicile under domestic law.

Dividends: two readings to know

The consolidated text sets the ceilings in the table above. It excludes receivables from the definition of dividends (Article 10 § 4) and waives these ceilings when the participation is connected with a permanent establishment or a fixed base in the other State (Article 10 § 5).

Point 2(a) of the protocol adds a most-favored-nation clause: if Vietnam agrees to lower withholding tax rates with a third country that is a member of the EEC, these rates also apply to the convention. The administration's commentary (BOI-INT-CVB-VNM, version of November 4, 2016) derives the following for dividends from Vietnamese sources: 5 % of the gross amount if the beneficiary is a company directly or indirectly holding at least 50 % of the capital, and 10 % in all other cases. The third countries mentioned are Belgium (1996 convention) and Ireland (2008 convention).

We do not take a position between the two interpretations. The rate applicable to a payment is determined on the date of payment, according to the applicable law and doctrine.

Royalties and technical services

The tax levied by the source state cannot exceed 10% of the gross amount of royalties. This term covers remuneration of all kinds, including copyrights, patents, trademarks, and know-how. Point 3 of the protocol excludes remuneration for technical services from royalties; these fall under Articles 7 or 13. The administration's commentary also indicates a rate of 5% for certain royalties, based on the most-favored-nation clause.

Interests: no dedicated article

The convention contains 28 articles, from "Persons Covered" to "Termination." None are titled "Interest." The only references we found are in point 4(a) of the protocol, which deals with interest paid between related persons: the standard amount falls under Article 20, while any excess remains taxable according to the legislation of each State. Article 20 stipulates that a resident's income not covered by the preceding articles is taxable only in the State of residence, unless it is attributable to a permanent establishment or fixed base.

We do not derive a general rule for all interests from this.

Capital gains

Gains from real estate located in the other State are taxable there (Articles 6 and 12, paragraph 1). The same applies to gains on shares, units, or rights in a company that directly or indirectly owns such property, when they are subject to the same tax regime (Article 12, paragraph 2). Gains on all other property are taxable only in the State of residence of the transferor (Article 12, paragraph 5).

Wages and the 183-day rule

Wages are taxable only in the state of residence, unless the employment is performed in the other state. Article 14, paragraph 2, provides an exception based on duration, subject to three cumulative conditions: a stay in the other state not exceeding a total of 183 days in any twelve-month period; an employer who is not a resident of that other state; and remuneration that is not borne by a permanent establishment or fixed base of the employer in that other state. The relevant period is a rolling twelve-month period, not the calendar year.

Pensions

Pensions paid in respect of previous employment are taxable only in the State of residence of the beneficiary (Article 17), subject to public pensions of Article 18 § 2. These are taxable in the paying State; they are taxable only in the other State if the beneficiary is resident and national of that State without having the nationality of the paying State.

Eliminate double taxation

For France, income from Vietnamese sources taxable in Vietnam under the treaty is taken into account for the calculation of French tax, and the recipient is entitled to a tax credit against French tax (Article 22, paragraph 1). For income other than dividends and royalties, the credit is equal to the amount of the corresponding French tax; for dividends and royalties, it is equal to the tax paid in Vietnam, up to the limit of the corresponding French tax. For Vietnam, paragraph 2 grants a deduction equal to the tax paid in France, capped at the portion of the corresponding Vietnamese tax.

In the event of non-compliant taxation, the case must be submitted to the authorities within three years of the first notification (Article 23). Article 24 provides for the exchange of information.

Inheritance and gifts: no agreement listed

Vietnam's entry in the administrative list of conventions does not include the letter "S" (inheritance) or the letter "D" (gift). This page does not explain how inheritance matters are settled between the two countries; the list of inheritance and gift conventions is detailed on our dedicated page.

Regarding wealth, Article 21 assigns real estate to the State where it is located and other assets to the State of residence. Article 2 concerns the solidarity tax on wealth; the application of the convention to the real estate wealth tax is not addressed here.

Dividends between France and Vietnam: a numerical example (fictitious profile)

Situation. A family, a fictitious profile, receives a gross dividend of €100,000 from a Vietnamese company in which they hold a small share, as private individuals residing in France.

Issue. She wants to know the maximum withholding tax allowed, and understand why she is getting two figures.

Strategy. She reads article 10 § 2 then the administration's commentary, and has the applicable rate checked on the date of payment.

Result. The consolidated text caps Vietnamese withholding tax at €15,000 for an individual (15 %). The tax authorities' commentary, applying the most-favored-nation clause, states 10 % in this case: €10,000, or €5,000 less. Conversely, for a dividend of €100,000 paid by a French company to an individual residing in Vietnam, the cap is €15,000; it drops to €5,000 if the beneficiary is a company that directly holds at least 10 % of the capital. These caps do not represent the actual tax withheld.

What changes depending on your situation

• Your residence as defined by the convention, and not just your address.
• The nature of the income: dividend, royalty, interest, salary, pension, capital gain.
• The level of ownership and the quality of the beneficiary, for dividends.
• The number of days spent in each state over twelve months.
• The nature and location of your assets.

An article should be read in light of the facts in your case, and no result is guaranteed in advance.