US-France tax treaty explained for expats
If you’re an American living, working, or retiring in France – or dividing your life between both countries – your tax situation can get messy fast.
The US–France tax treaty is designed to prevent double taxation, clarify which country gets to tax what, and offer relief through credits, exclusions, and defined taxing rights. It can save you real money — and headaches. But you need to know the rules, file the right forms, and apply the treaty the right way.
This article explains the tax treaty between US and France in plain English – no legalese, just what you need to know to stay compliant and keep the most of your income.
| Double taxation relief | You generally won’t be taxed twice on the same income if you file correctly and claim credits or exclusions. |
| Dual residency | If both countries claim you as a resident, the treaty decides which one gets taxing rights. |
| Foreign tax credit (FTC) | You can claim a credit on your US return for French income taxes paid usually with Form 1116. |
| Income, inheritance & property rules | Income types (salary, dividends, pensions, real estate) are taxed differently under the treaty. Inheritances and gifts are also protected to avoid double taxation. |
| Social security | You’ll pay into only one country’s system and may combine credits to qualify for benefits. |
| Filing requirements | Key forms: 8833, 1116, W-8BEN (US); 2042, 2047 (France). |
What is the US–France tax treaty?
The US–France tax treaty is an agreement between the United States and France that prevents situations where the same income is taxed by both countries.
The treaty defines which country gets taxing rights based on the type of income and where you live. It also outlines how tax credits, exemptions, or exclusions apply to avoid being taxed twice.
In addition to the income tax treaty, there's a lesser-known estate and gift tax treaty. This agreement helps cross-border families, especially those with property or heirs in both countries, avoid inheritance taxes and navigate estate planning more effectively.
Who does the US–France tax treaty apply to?
The US-France income tax treaty applies to you if you’re a:
- US citizen, green card holder, or resident alien with income from France
- French tax resident with income from the US
- dual resident under US and French tax law (living in or earning from both countries)
If you’re a dual-status alien — taxed as a US resident for part of the year and nonresident for the rest – the treaty may still impact how certain income is treated. You’ll need to apply the treaty’s tie-breaker rules carefully.
Also read. Filing US tax returns for dual-status aliens
Article 4 of the US–France tax treaty provides a five-step tie-breaker test to determine residency for treaty purposes. It looks at where you have a permanent home, where your personal and economic ties are stronger, and where you habitually reside.
How to avoid double taxation with the US–France treaty
Americans living in France can avoid being taxed twice on the same income through a mix of treaty benefits and US tax code provisions.
Foreign tax credit (FTC)
Foreign tax credit allows you to offset your US tax liability with income taxes you’ve paid to France. Article 23 outlines this relief from double taxation.
This credit is explicitly addressed in Article 23 (Relief from Double Taxation):
The United States shall allow to a resident or citizen of the United States, as a credit against the United States tax on income –
(a) the income tax paid or accrued to France by or on behalf of such citizen or resident; and
(b) in the case of a United States company owning at least 10 percent of the voting stock of a company which is a resident of France and from which the United States company receives dividends, the income tax paid to France by or on behalf of the distributing company with respect to the profits out of which the dividends are paid. — Article 23(1), US–France income tax treaty
Example: If you earn €130,000 in France, you might pay around €31,000 in French income tax. Your US tax on that income would be about $23,000 – so the foreign tax credit wipes out your US bill.
Re-sourcing of income
Article 24(4) (Nondiscrimination) enables re-sourcing of certain US-source income as French-source solely for the purpose of allowing a US tax credit. This is an advanced strategy used when France taxes income the US typically treats as US-source.
Christensen v. United States (2023)
In Christensen v. United States (2023), the US Court of Federal Claims ruled that foreign tax credits (FTCs) can be used to offset Net Investment Income Tax (NIIT) under the US–France tax treaty. This 3.8% surtax, typically applied to passive income like dividends and capital gains, had not previously been creditable. The Internal Revenue Service (IRS) initially denied the claim, but later conceded.
US citizens who paid NIIT and foreign taxes on the same income may now be eligible for refunds by amending prior returns. Taxes for Expats hosted a webinar explaining this ruling, who qualifies, and how to amend past returns. Watch the replay here.
Foreign earned income exclusion (FEIE)
Foreign earned income exclusion is not part of the tax treaty – it's a standalone US tax provision under IRC Section 911. Nonetheless, it’s worth mentioning because many US expats in France combine the FEIE and treaty benefits to minimize double taxation.
FEIE allows you to exclude up to $126,500 (2024 limit; $130,000 for 2025) of earned income if you meet the residency or physical presence test.
FEIE can’t be combined with the foreign tax credit on the same income. You can, however, use both on different types of income.
Example: You work for a French company and also receive US investment income. France taxes your salary; the US taxes both. You could use the FEIE to exclude your salary, and the FTC for taxes paid on dividends — or reverse it. Which works best depends on your income mix, tax rates, and filing status. High earners in France often benefit more from the credit, while those with moderate earned income may prefer the exclusion.
Need help choosing the right option? Tax professionals at Taxes for Expats can analyze your situation and help you save the most – while staying fully compliant.
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What is the saving clause to the US–France tax treaty?
The treaty includes a “saving clause” that allows the US to continue taxing its citizens and green card holders as if the treaty didn’t exist, with limited exceptions.
Even if the treaty treats you as a resident of France, the US can still tax your worldwide income unless a specific article says otherwise.
Always check whether a treaty benefit is exempt from the saving clause before relying on it. Taxes for Expats can help – reach out anytime.
How are different types of income treated by the tax treaty?
Dividends and interest (Article 10 & 11)
The treaty limits US tax on dividends to 15%, or 0% for certain pension or retirement accounts. Interest is generally tax-free in the source country if the recipient resides in the other.
Example: If you live in France and hold US stocks, your broker may withhold 15% on dividends – unless you file Form W-8BEN to claim the treaty benefit.
Capital gains (Article 13)
Capital gains on securities (like stocks) are taxed where you reside. But real estate gains are taxed in the country where the property is located.
Example: A US citizen living in France sells Apple stock – only France can tax the gain. But if they sell a rental condo in Miami, the US still taxes the capital gain.
Royalties (Article 12)
Royalties from patents, copyrights, and similar rights are taxed only by your country of residence – source-country taxes are waived.
Rental income (Article 6)
Rental income is always taxed where the property is located. You may also need to declare it in your country of residence and use tax credits to avoid double taxation.
Employment income (Article 14)
Income from work is taxed where the employment is physically performed, regardless of where your employer is based.
Self-employment income (Article 7)
Self-employment income is taxed where you have a permanent establishment. If you run your freelance business from France with no US office, only France can tax it.
Pensions and social security (Article 17 & 18)
Private pensions are taxed in your country of residence.
US social security is taxed only in France if you're a French resident – a rare treaty advantage.
Pro tip. Americans are subject to US tax on worldwide income, even if they’re tax residents of France under the treaty. While the tax treaty provides relief through credits, exclusions, and tie-breaker rules, it doesn’t exempt US citizens from filing. In many cases, you’ll need Form 8833 to claim treaty benefits.
The US-France estate & gift tax treaty
In addition to the income tax treaty, the France–US estate and gift tax treaty helps avoid double taxation on inheritances and gifts. It assigns exclusive taxing rights for certain assets – for example, real estate is only taxed in the country where it’s located, even if the owner or heir lives in the other country.
It also allows tax credits when both countries tax the same transfer, and uses tie-breaker rules to resolve dual domicile cases. This matters most for cross-border families and French heirs of US estates.
The US-France totalization agreement
The US-France totalization agreement coordinates both countries' social security systems to prevent double contributions and ensure you don’t pay into both for the same work. This is especially relevant for Americans working in France or French nationals working in the US.
Under the agreement, you generally pay social security taxes to only one country – typically where the work is performed. If you’re temporarily transferred (for five years or less), you can stay under your home country’s system and avoid paying into the other.
To claim this exemption, request a Certificate of Coverage:
- US workers going abroad: Request from SSA here.
- French workers in the US: Apply through France's CLEISS.
Totalization agreement also lets you combine coverage credits earned in both countries to qualify for retirement, disability, or survivor benefits.
Find more information here:
How to claim tax treaty benefits: forms and rules
To claim tax treaty benefits properly, you’ll need to file the correct forms with both tax authorities.
| Purpose | US tax form | French tax form |
|---|---|---|
| Claim tax treaty benefit | Form 8833 | Form 2047 (Formulaire n2047 - Déclaration des revenus encaissés à l'étranger) / 2042 |
| Claim foreign tax credit | Form 1116 | Form 2042 (Formulaire n2042 - Déclaration des revenus) + credits annex |
| Reduce withholding rates (US) | W-8BEN | Form 2042 |
When to file US and French tax returns
US tax returns are due April 15, but Americans living abroad get an automatic extension to June 16, 2025.
Need more time? File Form 4868 to extend the deadline to October 15.
French tax returns are due mid-May to early June, depending on where you live and whether you file online. The exact dates change annually – check with impots.gouv.fr for the latest.
Pro tip. To ensure reduced withholding tax on US income (like dividends), submit Form W-8BEN to your financial institution before income is paid.
Claim the treaty benefits with Taxes for Expats
The US–France tax treaty can help you avoid double taxation and save thousands – but only if you apply it correctly.
At Taxes for Expats, we specialize in cross-border tax compliance for Americans living in France, French residents with US income, and dual-status taxpayers caught between two systems.
With over 20 years of experience helping US expats in France, we know exactly how to make the treaty work for you. Let us handle the paperwork, planning, and filings — so you don’t have to.
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FAQ
No most US states don’t recognize international tax treaties. So even if the treaty reduces or eliminates your federal tax, your former state (like California or New York) may still expect a return. Each state has its own rules, so it’s smart to check with a tax pro or your state’s tax department to be sure you're fully in the clear.
Yes. US citizens and green card holders must file annually, no matter where they live. The treaty helps reduce tax owed but it doesn’t remove the filing obligation.
Yes, but not on the same income.
Private pensions are usually taxed only in your country of residence. US social security is taxed only in France if you live there a rare benefit under Article 18.
The USFrance estate and gift tax treaty helps avoid double taxation by assigning taxing rights and offering tax credits when both countries claim the same asset.
This guide is for info purposes, not legal advice. Always consult a tax pro for your specific case.