Foreign capital income: tax credit and form 2047

If you are a tax resident of France and have received income from foreign sources, or received income abroad, you must file form 2047. Dividends and interest from foreign securities that you receive in France through a French institution are reported directly on form 2042, without filing 2047. The tax credit that prevents double taxation depends on the tax treaty between France and the source country: the method is stipulated in the applicable treaty.

This page explains the role of form 2047, methods for eliminating double taxation, and the carry-forward lines on form 2042 C. It does not provide the method or tax rate for each country regarding dividends and interest, nor does it address social security contributions on these incomes. References are to the 2026 Income Tax Guide, which covers 2025 income. The lines and thresholds may change for the 2026 tax return: please review the relevant information for that year.

Who needs to fill out form 2047?

The form is entitled "Declaration of income from foreign sources or received abroad no. 2047". According to the information leaflet, any person domiciled in France who has received income from foreign sources, or received income abroad, must complete it.

Income received abroad is also included when it originates from French sources. The "Securities and Movable Capital" section of form 2047 records your income, whether from French or foreign sources, received abroad. You then report this income on form 2042 according to its nature.

Two clarifications prevent unnecessary or incomplete statements:

• Foreign securities collected in France. Income from foreign securities that you receive in France, through a French institution, is reported directly on form 2042, without using form 2047. The BOFiP specifies that income from foreign securities is subject to the same tax regime, whether received in France or abroad.
• Payer established abroad. The information leaflet indicates that you must file form 2047 when the paying institution is located abroad. The flat-rate withholding tax of 12.8% (%), which constitutes an advance payment of income tax, is declared and paid by the taxpayer when filing form 2778, once their reference tax income reaches the prescribed limits.

If you hold a foreign bank account, it must be declared at the same time as your income tax return. This obligation is separate from form 2047: it is addressed on the page for form 3916-bis.

Methods to combat double taxation

The same dividend can be taxed in the country of origin and then again in France. The tax treaty specifies how France eliminates this double taxation. The practical guide indicates that elimination can be achieved through two methods: tax credit, by granting a tax credit when the income is taxable in France, and exemption. Tax credit takes two forms, which correspond to separate sections of form 2047. Therefore, form 2047 contains three sections that you should be aware of.

The tax credit equal to French tax is explained in the brochure for income such as rental income, wages and salaries, and pensions. For securities, dividends, and interest, the brochure describes a credit equal to the tax actually paid abroad, up to the limits set by tax treaties, without exceeding the French tax on that income. The framework that applies to your income is therefore explained in the instructions for form 2047: do not consider the first line of the table as a rule for your dividends.

The brochure classifies dividends and interest as investment income (capital gains on real estate, dividends, interest, and royalties) to which the tax credit applies. Table 1 of the brochure, which provides the method by country, only addresses salaries. Therefore, nothing is deduced from it regarding your dividends.

Without a tax treaty, income is taxable in France and double taxation is not eliminated. For countries whose income does not qualify for a tax credit, the BOFiP (French Official Tax Bulletin) indicates that the income is subject to French tax on its net amount after foreign tax.

The carry-over lines of 2042 C

Once form 2047 is completed, you transfer the amounts to your income tax return. According to the practical guide, the following lines are concerned. The list below is not exhaustive: the instructions for form 2042 C are the authoritative source.

The income itself must also be declared according to its nature. The brochure on investment income indicates that dividends from foreign sources must be declared for their gross amount, plus the applicable tax credit. The relationship between this information and the tax credit lines mentioned above should be verified in the instructions for forms 2047 and 2042 C before completing the forms.

Five rules to know

• The tax credit is itself taxable. According to the BOFiP, the tax credit actually deductible constitutes taxable income in the same way as the product which gives entitlement to it, and is therefore added to that product.
• The credit has two limits. The tax levied abroad cannot exceed the amount permitted by the treaty. The tax credit cannot exceed the French tax due on that income. In some treaties, the tax credit is fixed at a rate specified in the treaty.
• A refund is possible according to the agreement. Some tax treaties provide for a right to a refund of the tax withheld at source. According to the BOFiP (French Official Tax Bulletin), this refund can be issued in the form of a reimbursement.
• Currencies. Income received in foreign currency is converted into euros according to the euro exchange rate on the date of receipt.
• The 40 % allowance only applies with the option for the scale. It applies to distributions from companies in the European Union or countries linked to France by a tax treaty, subject to certain conditions. It only applies if you opt for the progressive tax scale. It does not exist for the flat tax rate of 12.8% (%).

What changes depending on your situation

• The State of the source and its agreement with France : method, authorized withholding rate, possible tax relief.
• The place of collection : foreign account (2047) or paying establishment in France (direct transfer to 2042).
• The nature of the income : dividend, interest, royalty or capital gain do not have the same lines.
• Your method of taxation : flat-rate levy or option for the scale, which opens the allowance of 40 %.
• Foreign tax receipts : the credit assumes that a tax has actually been paid abroad.

The rule depends on your situation. No results are guaranteed.

Numerical example (fictitious profile)

Situation. Hélène, a French tax resident, holds shares in a company from a country with which France has a tax treaty. She receives €10,000 in gross dividends in a foreign bank account. Assumptions in this profile: the treaty allows a withholding tax of up to 12% (%), or €1,200, and the French tax corresponding to these dividends is assumed to be €1,280. This amount is not calculated here. The tax credit is that of the "equal to foreign tax" method.

Issue. What is the amount of Helene's tax credit, based on the withholding tax actually applied by the source state?

Strategy. She fills in form 2047 (frame 7), reports the credit on line 8VL of form 2042 C, with the corresponding net income amount on line 8PL, and compares two cases: a withholding of 12 % and a withholding of 20 %.

Result.

In case B, the credit remains at €1,200: the portion deducted beyond the agreed amount does not generate any credit. The excess €800 can only be recovered if the agreement provides for a tax reduction through reimbursement, a process separate from the declaration.

This profile is fictitious. The rates of 12 % and 20 % and the corresponding French tax of €1,280 are hypothetical. The example does not calculate the total tax: the tax base, the interaction of the tax credit with the flat-rate levy or the progressive tax scale, any advance payment made via form 2778, and social security contributions are not addressed. The figures illustrate the maximum tax credit. They do not reflect your specific situation.