Tax treaty between China and France tax enters into force, English-language text available

A new tax treaty between France and China became effective December 28, 2014.

The agreement, which was signed November 26, 2013, reduces taxation in the source country on dividends to 5 percent for corporate shareholders that hold at least a 25 percent share of the company paying dividends. Withholding tax on dividends remains at a 10 percent rate in other cases.

Taxation in the source country on interest received by listed government entities is zero and is 10 percent in other cases. Source country taxation on royalties is set at a 10 percent rate.

The treaty also adds new a provision to counter treaty-shopping, and adds limitation of benefit clauses to the interest, dividend, royalties, and other income articles.

See:

• Agreement between the government of the People’s Republic of China and the government of the French republic for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income (translation)