Focus on the tax treaty between France and the Emirates – its impacts for individual residents of the U.A.E.
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The tax treaty aimed at avoiding double taxation between the French government and that of the United Arab Emirates was signed on July 19, 1989, and was subsequently amended in 1993 to now also include a multilateral convention to prevent base erosion and profit shifting since its entry into force on January 1, 2019 (the "Treaty").
The objectives of this Convention are twofold.
Firstly, both countries wish to promote their economic relations and cooperation in tax matters.
Furthermore, they wish to eliminate double taxation in respect of certain taxes expressly covered by the Convention[1].
However, the Convention has provided a safeguard: the arrangements or strategies put in place by taxpayers, whether individuals or legal entities, must not have the sole and exclusive purpose of obtaining tax relief provided for under the Convention.
The French and Emirati taxes covered by the Convention are limitatively[2]:
income tax, including in the case of a real estate sale;
corporation tax on companies registered in France or the UAE;
the solidarity wealth tax on real estate; and
inheritance tax.
The concept of tax residence: what are the criteria?
The essential concept within this Convention, as with any tax treaty, is that of tax residence.
France operates on a bundle of indicators regarding the tax residence of a French citizen[3].
Thus, you will be tax-domiciled in France if:
your family home remains in France (spouse/ children); and/or
if a person carries out a non-ancillary professional activity in France, whether as an employee or otherwise; and/or
if you have the center of your economic interests in France (investments of any kind, head office of a company, parent company), i.e., it is in France that you derive the major part of your income (in comparison with the Emirates).
And in the case of dual residency?
However, if you reside for more than 183 days in the UAE with a residence visa, you are also a tax resident of the UAE; this is when the Treaty becomes of utmost importance in determining which country you are tax resident of.
The treaty provides that in the event of dual tax residency, reference must be made[4] :
to the taxpayer's permanent home;
if the latter has two permanent homes, reference must then be made to their center of vital interests (most pronounced personal and economic ties);
if the latter does not have a residence and does not habitually reside in either of the two countries, the tax residence will be that of their nationality.
As a reminder, the concept of tax residence is very important because if the French authorities deem that you are a tax resident in France, then all income and profits arising from the UAE will be taxable in France.
Thus, this article will help you shed light on the Tax Treaty if you are a French citizen with tax residence in the UAE.
En cas de double résidence fiscale, comment la convention départage-t-elle les deux États ?
Revenus immobiliers de source française [5]
La Convention stipule que les revenus immobiliers sont imposés respectivement dans le pays où se situe le bien immobilier.
Par conséquent, même si vous êtes résident fiscal des Émirats arabes unis d'après les critères susmentionnés, les revenus tirés de biens immobiliers situés en France seront imposables en France. Par conséquent, même si vous possédez des parts dans des sociétés immobilières et non les biens eux-mêmes, dès lors que la possession de ces parts vous donne droit à la jouissance du bien, vous serez imposé en France.
À l'inverse, si les parts et actions d'une société immobilière ne vous donnent pas le droit de disposer du bien, ces revenus ne seront pas considérés comme des revenus immobiliers et seront imposés en tant que revenus de capitaux mobiliers.
Dividendes [6]
Si vous avez investi dans des actions ou titres financiers de sociétés françaises et que vous percevez des dividendes, ces revenus ne seront pas imposables en France mais aux Émirats et seront donc par définition exonérés d'impôts.
Il existe toutefois une exception qui s'applique à tous les types de revenus visés par la Convention : si ces dividendes sont liés à une activité professionnelle exercée en France (profession industrielle, commerciale ou libérale), alors dans ce cas, l'impôt sur ces dividendes sera dû en France.
Revenus de capitaux mobiliers de toute nature [7]
Si vous êtes résident fiscal aux Émirats et que vous percevez des intérêts de créances françaises, vous êtes imposé sur ces revenus aux Émirats et en êtes donc exonéré, au même titre que les dividendes.
Par conséquent, si les revenus provenant de créances françaises sont liés à une activité professionnelle en France, alors ces derniers seront imposables en France.
Redevances [8]
Toute rémunération issue d'un droit de propriété intellectuelle et/ou industrielle ( ex. , droit d'auteur, brevet, marque de fabrique, procédé de fabrication, codage informatique, etc.) sera payée dans le pays de résidence du bénéficiaire.
Ainsi, si vous êtes résident fiscal aux Émirats et que vous percevez des rémunérations provenant de redevances, vous ne paierez aucun impôt en France, à une exception près : si ces redevances proviennent d'une activité professionnelle exercée en France par l'intermédiaire d'un établissement stable.
Plus-values [9]
Si vous êtes résident des Émirats mais que vous vendez un bien immobilier non lié à une activité professionnelle ou si vous vendez des parts dont l'actif est constitué de plus de 80 % de biens immobiliers situés en France, vous serez alors assujetti à l'impôt français sur les plus-values.
En revanche, si vous vendez des biens meubles, y compris des valeurs mobilières, ces gains ne seront imposables qu'aux Émirats arabes unis, à moins qu'ils ne soient liés à l'une de vos activités professionnelles exercées en France.
Toutefois, en ce qui concerne les biens meubles, il existe une clause de sauvegarde : si les parts cédées représentent au moins 25 % du capital d'une société française, l'impôt sur les plus-values de ces parts sera alors dû en France.
Professions indépendantes [10]
Si vous êtes résident fiscal aux Émirats mais continuez d'exercer une profession indépendante en France, vous continuerez à payer des impôts sur les revenus tirés de cette activité.
En revanche, si vous exercez votre activité indépendante par l'intermédiaire d'une base fixe ou d'un établissement stable situé aux Émirats, ces revenus seront exonérés d'impôts en France.
Revenus salariés [11]
Si vous êtes résident fiscal aux Émirats et que vous percevez des revenus d'un emploi salarié dans ce pays, vous êtes exonéré d'impôts français.
Il existe toutefois une exception : si vous êtes employé par une société émiratie et que vous travaillez physiquement en France, alors la France se réserve le droit de vous imposer sur vos revenus de source émiratie, à moins que les trois conditions suivantes ne soient cumulativement remplies :
vous séjournez en France pendant moins de 183 jours au cours de l'année fiscale concernée ; et
Votre employeur n'est pas un résident français ; et
La charge des salaires n'est pas supportée en France (par l'intermédiaire d'un établissement stable, par exemple).
Pensions du secteur privé français [12]
En ce qui concerne les pensions et rémunérations payées au titre d'un emploi salarié antérieur au changement de résidence fiscale en France (à l'exclusion du travail au sein de la fonction publique), elles ne sont en principe pas imposables en France.
Toutefois, les pensions versées en application de la législation française de sécurité sociale sont imposables en France, comme c'est le cas, par exemple, de l'assurance vieillesse volontaire.
Impôt sur la fortune [13]
Si vous êtes résident fiscal aux Émirats arabes unis mais possédez en France des biens immobiliers non liés à une activité professionnelle et dont la valeur vous rend redevable de l'impôt sur la fortune immobilière en France, vous n'aurez à le payer que si la valeur de vos biens français dépasse :
la valeur des actions françaises cotées en bourse ou d'une société d'investissement agréée (couvrant tous les établissements de crédit, y compris les banques françaises non cotées en bourse) [14] ; et
la valeur des créances françaises (sur l'État ou des sociétés) que vous détenez.
Ces actions et créances doivent également être détenues depuis plus de six mois pour permettre une telle exonération de l'impôt sur la fortune immobilière.
Succession [15]
En ce qui concerne la succession de biens immobiliers, quelle que soit votre résidence fiscale, celle-ci sera imposable dans l'État où se situent les biens.
Concernant les biens meubles liés à une activité professionnelle au sein d'un État, ils seront soumis au droit successoral de cet État.
Enfin, concernant les autres biens meubles et sous réserve de dispositions testamentaires contraires, les biens seront imposés dans l'État dont le défunt était résident au moment de son décès.
Échange d'informations [16]
Les deux États se sont engagés à échanger des informations qui ne se limitent pas aux impôts visés par la Convention.
Quels revenus restent imposables en France après une expatriation aux Émirats ?
[1]It must therefore be understood a contrario that taxes not covered by the Convention must be paid jointly in France and the United Arab Emirates.
[2]Article 2 of the Convention
[3]Articles 4 A and 4B of the French General Tax Code (Code général des Impôts)
[4]Article 4 of the Convention
[5]Article 5 of the Convention
[6]Article 8 of the Convention
[7] Article 9 of the Convention
[8] Article 10 of the Convention
[9] Article 11 of the Convention
[10] Article 12 of the Convention
[11] Article 13 of the Convention
[12] Article 14 of the Convention
[13] Article 16 A of the Convention
[14] BOI-INT-CVB-ARE, 12 Sept. 2012, § 20. – Instr. 8 Apr. 2002 : BOI 14 B-2-02 : Dr. fisc. 2002, No. 17, instr. 18822
[15] Article 17 of the Convention
[16] Article 21 A of the Convention
Les erreurs les plus fréquentes lors d'une expatriation vers les Émirats arabes unis
Over the years, the tax attractiveness of the United Arab Emirates has given rise to many misconceptions. Some are maintained by incomplete information, others by a misinterpretation of international tax treaties.
In practice, most of the difficulties encountered by taxpayers do not originate in the France-UAE Tax Treaty itself, but in a misunderstanding of how it works or how it is applied in relation to French domestic law.
Thinking that a residence visa is enough to become a French non-fiscal resident
This is probably the most common mistake.
Obtaining a residence visa or an Emirates ID is an administrative condition to live in the United Arab Emirates. It does not, on its own, determine tax residence under French law.
The French tax administration does not look only at administrative documents. It examines the reality of the taxpayer's situation.
Thus, a person who keeps their family home in France, continues to carry out an essential part of their professional activity there, or maintains the center of their economic interests there may remain considered a French tax resident, regardless of their administrative or internal tax status in the Emirates.
In other words, tax residence is a matter of facts, not formalities.
Confusing the absence of tax in the Emirates with the absence of taxation in France
The United Arab Emirates does not levy income tax on individuals.
This characteristic sometimes leads some taxpayers to believe that a transfer of tax residence automatically results in a total exemption from their French tax obligations.
The reality is more nuanced.
A tax resident of the Emirates may well remain taxable in France on certain French-source income, including real estate income or, in certain situations, investment or professional income.
The absence of tax in the State of residence does not have the effect of suppressing the right to tax granted to France by the France-UAE Tax Treaty and/or French domestic tax law.
Retaining the center of economic interests in France
The concept of center of economic interests is often underestimated.
Yet, it occupies an essential place in audits concerning expatriations.
The administration may notably examine:
the primary source of income;
the location of the main investments;
corporate mandates and their place of exercise ;
the companies actually managed;
the place where important economic decisions are made;
the taxpayer's habitual financial flows.
In some cases, a person materially resides in Dubai for several months of the year while continuing to manage all of their economic activities from France. Such a situation can lead the administration to question the reality of the transfer of tax residence.
It is therefore not enough to move your place of life; it is also necessary for the asset and professional organization to be consistent with this expatriation.
Neglecting to prepare for departure
An expatriation is not just about the day the plane takes off.
Tax consequences and declarations are often prepared several months in advance.
Departure can have an impact on tax returns, the management of French companies, the holding of real estate assets, financial investments, life insurance contracts, or the application of specific mechanisms such as the Exit Tax.
As every situation is different, anticipation generally helps to avoid costly adjustments or subsequent litigation.
Why are tax audits related to expatriation increasing?
International mobility has been growing steadily for several years. At the same time, tax administrations have increasingly powerful cooperation tools at their disposal.
The automatic exchange of information between administrations, particularly banking institutions, enhanced reporting obligations, and international standards developed under the impetus of the OECD now allow States to have a much more complete view of taxpayers' wealth and tax situations.
In this context, expatriations to low-tax jurisdictions naturally receive particular attention.
This obviously does not mean that an expatriation to the United Arab Emirates is suspicious or irregular.
On the other hand, when a taxpayer claims to have transferred their tax residence, the administration has the right to verify that this claim corresponds to an economic, family, and personal reality.
Audits then focus less on the existence of a visa or a lease agreement than on the overall coherence of the situation: where does the person actually live? Where do they work? Where do they make their decisions? Where are their main interests located?
This approach is in line with the logic adopted by the tax treaty itself, which always favors the reality of the facts over appearances.
The France-UAE Tax Treaty never replaces a personalized analysis
The tax treaty between France and the United Arab Emirates constitutes an indispensable legal framework to prevent double taxation situations. However, it does not automatically resolve every situation encountered in practice.
Each expatriation has its own specific features.
The applicable tax treatment depends, in particular, on the composition of the wealth, the nature of the income, the activities carried out, the companies held, the family organization, or the ties maintained with France.
Two taxpayers living in the same building in Dubai may thus fall under completely different tax situations.
It is precisely for this reason that an individualized analysis remains essential before any expatriation or wealth reorganization project.
Legal and tax anticipation not only secures the transfer of residence, but also identifies any potential reporting obligations, risks of recharacterization, and the consequences associated with retaining interests in France.
At Expats Law Firm, we assist individuals, entrepreneurs, and investors daily in their international mobility projects. Our approach is not to search for standardized solutions, but to build a strategy in compliance with the applicable laws, the Franco-Emirati tax treaty, and the financial objectives of each client.
Questions fréquentes sur la convention fiscale entre la France et les Émirats arabes unis
Does a Frenchman living in Dubai still pay taxes in France?
Not necessarily, but they do not automatically cease to be taxable in France solely because of their relocation to the United Arab Emirates.
It must first be determined whether the taxpayer has indeed transferred their tax residence within the meaning of French law and the tax treaty. Next, the nature of the income received must be examined. Certain French-sourced income, particularly real estate income, may continue to be taxed in France even when the taxpayer is a tax resident of the Emirates.
Is spending more than 183 days in Dubai enough to become a tax resident of the Emirates?
No.
The 183-day threshold is often presented as a general rule, whereas it is only one factor among others.
The determination of tax residence depends on the criteria provided by domestic laws as well as, where applicable, the tie-breaker rules provided by the tax treaty. Family situation, economic ties, and the actual organization of personal life remain decisive factors.
Does an Emirati residency visa guarantee the loss of French tax residence?
No.
The residency visa allows for legal stay in the United Arab Emirates, but it has no automatic effect on the qualification of tax resident in France.
The French tax administration assesses the situation in light of the criteria set by Article 4 B of the General Tax Code and, in the event of a conflict of residence, the provisions of the tax treaty.
Can I keep real estate in France after my expatriation?
Yes.
Owning real estate located in France does not, on its own, prevent someone from becoming a tax resident of the Emirates.
On the other hand, the income generated by this property as well as certain real estate capital gains remain liable to be taxed in France in accordance with the treaty provisions.
However, each situation must be assessed in light of the taxpayer's overall assets and the ties maintained with France.
Do dividends paid by a French company remain taxable in France?
The tax treatment depends on several parameters, notably the provisions of the tax treaty, the status of the beneficiary, and the nature of the distributed income.
It is therefore impossible to provide a general answer without examining the specific situation concerned.
A prior study makes it possible to precisely identify the respective taxing rights of France and the United Arab Emirates.
Can the French authorities audit an expatriation to Dubai?
Yes.
The transfer of tax residence can be subject to an audit, like any other situation involving tax stakes.
The administration can ask the taxpayer to justify the reality of their expatriation by means of various elements: effective residence, family organization, professional activity, asset management, or even the center of economic interests.
The mere production of a visa or a lease agreement is not always sufficient to demonstrate the actual transfer of tax residence.
Is a company created in Dubai enough to stop being taxed in France?
No.
The creation of an Emirati company does not automatically result in the transfer of its director's tax residence, nor does it guarantee the absence of taxation in France.
Tax administrations notably examine the place where strategic decisions are made, where the activity is actually carried out, and where the effective management of the company is located.
An international structuring must therefore always be analyzed as a whole.
Why get support before expatriating?
An expatriation raises questions that go far beyond a mere change of country of residence.
It can have consequences for income tax, asset taxation, inheritance, holding of companies, real estate investments, reporting obligations, and even the application of the Exit Tax.
An analysis carried out beforehand secures the project, anticipates potential tax risks, and organizes the expatriation in compliance with French and Emirati laws.
Jurisprudence citée
Conseil d'État, 26 janvier 2011, n° 308996.
Conseil d'État, 27 janvier 2010, n° 304995.
Conseil d'État, 7 juillet 2004, n° 243679.
Conseil d'État, 9 novembre 2015, n° 370054
