The France-United States tax treaty: who taxes what, and how to use it
US persons: worldwide US taxation follows the citizen everywhere; the treaty does not switch the IRS off.
The 60-second essentials
- Purging gains before the move is an arbitrage between local tax and the French 31.4% flat tax: on €70,000 of latent gains, up to €21,980 rides on that single calculation.
- Your French rents and property gains stay taxed in France throughout non-residence: 17.2% social levies (unfurnished) or 18.6% (furnished); the average-rate option is worth computing every year.
- This treaty also covers inheritance: a rare privilege (about thirty conventions in the whole French network).
- France’s inbound regime (art. 155 B) can exempt part of your pay for up to 8 years, provided the contract is signed BEFORE you move.
- Treaty-specific caution: US persons: worldwide US taxation follows the citizen everywhere; the treaty does not switch the IRS off.
Tax residence: the United States-France match
Everything starts here: no treaty benefit exists for someone who remains French tax-resident. France’s art. 4 B casts three independent nets (home, main activity, centre of economic interests) and one is enough. If both States claim you, the treaty cascade decides: permanent home, centre of vital interests, habitual abode, nationality, in that strict order. The evidence file is built during the expatriation, never after.
Who taxes what, income by income
Near-universal standard: income from immovable property is taxable where the property sits. Your French rents and property gains remain taxed in France whatever your residence.
As a non-resident you file in France every year. Tax is computed at the 20% minimum rate (30% above a threshold) unless the average-rate option is better, which it often is. Social levies: 17.2% (unfurnished) / 18.6% (furnished).
On €26,400 of yearly unfurnished rent, the default take (20% + 17.2%) reaches €9,821: compute the average-rate option every year.
OECD-model principle: salaries are taxable where the work is physically performed, with a framed exception for short assignments (the 183-day rule, exact conditions in the text).
Working in United States, your pay follows local law during non-residence. Hybrid patterns reawaken French tax: days worked in France, remote work from France for a local employer, or pay delivered by a French entity.
Shared taxation: the residence State taxes, and the source State may withhold up to a treaty cap. The exact cap is read in the official text linked above.
On the French side, the domestic withHolding on dividends paid to a non-resident individual is 12.8%, adjusted to the treaty cap where lower. Forms 5000/5001 secure the treaty rate at source; without them you pay the domestic rate and wait months for refunds.
Treaty cap verified at 15% for individuals on this treaty (sources: BOFiP, consolidated text).
Same sharing logic as dividends, with an eventual source withHolding capped by the text.
A favourable French quirk: France generally does not withhold on interest paid to non-residents (except non-cooperative jurisdictions, 75%). Treatment therefore mostly depends on local law and on your French filing after the move.
Classic architecture: private pensions are generally taxable in the State of residence; government pensions in the paying State; social security pensions follow the text’s own rule.
Retired in United States: each pension’s nature (private, government, social security) decides which State taxes it. A misqualified pension means double taxation or reassessment.
General treaty rule: gains on securities are taxable in the seller’s State of residence. Classic exceptions to pin on the text: substantial participations and real-estate-rich companies.
Local law taxes disposals: purging becomes a computed arbitrage between today’s local tax (allowances, Holding periods) and tomorrow’s French 31.4%. The right answer differs line by line within one portfolio; local exit mechanisms add a second calendar.
On €70,000 of latent gains, up to €21,980 rides on the purge decision alone.
On the French side, non-residents face IFI only on French real estate, above €1.3M of net taxable property wealth (French rule, 2026).
Few treaties cover wealth tax: absent an express clause to pin on the text, the French rule above stands. After a move to France, foreign property enters the IFI base, with a partial 5-year relief for new arrivals.
Income-tax treaties and inheritance treaties are separate texts: coverage of one never implies the other.
A rare privilege: this treaty has treaty inheritance coverage. Used upstream (structuring, lifetime gifts), it can keep non-French assets out of French inheritance duties despite France-resident heirs. One of the strongest planning levers in the network.
The local tax system, in brief
A complete, mature tax system: worldwide taxation of residents, capital gains tax, and often exit mechanisms (departure tax, deemed disposal) taxing latent gains on the way out. Nothing is a reflex on this treaty: every arbitrage is a line-by-line calculation between today’s local tax and tomorrow’s French 31.4%.
Known convention specifics
- Separate 1978 inheritance treaty
- Dividends: treaty cap verified at 15% for individuals
- 401(k) and IRA: withdrawals received by a French resident are taxable in France; accounts must be reported yearly (form 3916)
Three worked examples (2026 French rules)
Case 1, the purge. €70,000 of latent gains. Selling before the move triggers local tax; doing nothing books €21,980 of future French flat tax on the whole historical gain. The optimum is usually a partial, line-by-line purge.
Case 2, French rent. €26,400 of unfurnished French rent: the default take is €9,821 (20% minimum + 17.2%); the average-rate option, recomputed yearly, often cuts it sharply.
Case 3, moving to France with art. 155 B. Hired into France at €150,000 gross with the contract signed before the move: a 30% impatriation premium (€45,000) is income-tax exempt, worth about €13,500 per year at a 30% marginal rate, renewable up to 8 years. The same contract signed one week after the move: zero.
These are examples; yours has its own amounts and dates. The free assessment runs the 47-point checklist on your United States-France situation in 3 minutes. Calculate my situation →
The treaty’s classic traps
1. Purging too late. Selling ’on arrival’ instead of before leaving United States: historical gains become French-taxable at 31.4%. The window closes on the day residence transfers.
2. Signing the contract after the move. France’s inbound regime (art. 155 B) requires recruitment from abroad: a contract signed once back closes up to 8 years of exemptions. No cure.
3. Never computing the average rate. The 20/30% minimum applies by default; for many profiles the average rate is lower. Not running the numbers each year is paying an optional tax.
4. Ignoring the inheritance coverage. This treaty has rare treaty inheritance coverage: not using it in your estate structuring wastes a major lever.
FAQ
Is the 1994 treaty still in force in 2026? Yes, subject to the caution flagged above. Recent changes come mostly from French domestic law (31.4% flat tax and higher social levies in 2026, IFI unchanged at €1.3M): what moves is the treaty/domestic-law interface.
How do I prove tax residence in United States? Through real life, not paperwork alone: a permanent home, actual presence, schooling, accounts and activity on the spot, plus the local tax-residence certificate. The evidence file is built during the expatriation; it is nearly impossible to reconstruct afterwards.
Do I still file in France while abroad? Yes, as long as any French-source income remains: rents, dividends, property gains. The non-resident return stays annual, at the 20/30% minimum unless you opt for the average rate.
Will my heirs in France be taxed on my foreign assets? This treaty’s inheritance treaty allocates taxing rights between the two States: structured upstream, it can shield non-French assets.
The summary table
| Income / event | While non-resident | After moving to France |
|---|---|---|
| French rent | France: 20/30% min. + 17.2/18.6% levies | Ordinary French scale |
| French property gain | France: 19% + levies, 22/30-year taper | Ordinary French regime |
| French dividends | French withHolding 12.8%, treaty cap where lower | 31.4% flat tax or scale |
| Securities gains | Local tax: line-by-line arbitrage | 31.4% on unpurged gains |
| Local salary | Taxed per the treaty (place of work) | N/A; art. 155 B if hired before the move |
| Pensions | Private / government / social security split: see text | French taxation, credit per the text |
| Inheritance | Treaty inheritance coverage | Art. 750 ter: worldwide French base |
| Wealth | IFI on French property over €1.3M | Worldwide IFI base (5-year partial relief) |
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In the same region, North America
Comparing several destinations in this region? These treaties are often reviewed together:
Canada · Quebec fiscal entente · Mexico · Portugal · Switzerland
Sources: 1994 treaty (official text on Légifrance; reference list on impots.gouv.fr); French tax code arts. 4 B, 155 B, 197 A, 244 bis A, 750 ter, 784 A; 2026 Finance and Social Security Finance Acts. Treaty withHolding caps are read in the linked official text: we publish no unverified treaty rate.