The taxation agreement between the French government and the Government of the United Arab Emirates was signed on July 19, 1989 and was amended in 1993 to include today also a multilateral treaty to prevent base erosion since the entry into force on January1, 2019 (the “Convention”).


The objectives of this Convention are multiple. 

Firstly, both countries wish to promote their economic relations and cooperation in tax matters. 

In addition, they wish to eliminate double taxation in respect of certain taxes specifically covered by the Convention[1].

However, the Convention has provided a caveat: the arrangements or strategies put in place by taxpayers, whether natural or legal persons, must not have the sole purpose of obtaining tax relief under the Convention.

The French and Emirati taxes concerned by the Convention are limited to [2]:

– income tax, including in the case of a sale of a real estate property;
– tax on companies registered in France or in the U.A.E;
– the solidarity tax on real estate wealth; and
inheritance tax.

The concept of tax residence: what are the criteria?

The essential concept in this Convention, as in any tax agreement, is that of tax residence. 

France operates on the basis of a set of indicators concerning the tax residence of a French citizen[3].

Thus, you will be domiciled for tax purposes in France if:

– your family home remains in France (spouses/ children); or
– if a person exercises a non-ancillary professional activity in France whether as an employee or not; or
– you have in France the center of your economic interests (investment of all kinds, head office of a company, parent company) i.e. that it is in France that you derive most of your income (in comparison with the Emirates). 
And in case of double residence? 

However, if you reside in the U.A.E for more than 183 days with a residence visa you are also a tax resident of the Emirates, then the Convention is of great importance in order to determine which country you depend on for tax purposes. 

The convention provides that in the case of dual tax residence, it will be necessary to refer to[4]:

– the taxpayer’s permanent home;
– if the latter has two usual homes, it will then be necessary to take into account on his vital interests (the most pronounced personal and economic ties);
– if the latter does not have a residence and does not habitually stay in either country, the tax residence will be that of his nationality. 
As a reminder, the notion of tax residence is very important because, if the French authorities consider that you are a tax resident in France then all income and profits that come from the Emirates will be taxable in France. 

Thus this article will help you shed light on the Tax Convention if you are a French citizen with a tax residence in the U.A.E. 

French real estate income[5]

The Convention provides that real estate income is taxed respectively in the country where the property is located. 

Thus, even if due to the criteria mentioned you are a tax resident in the Emirates, income from real estate located in France will be taxable in France. As such, even if you are the owner of shares in real estate companies and not a property, as long as the ownership of these shares gives you the use of the property you will then be taxed in France. 

On the other hand, if the shares of a real estate company do not give you the right to dispose of the property, this income will not be considered as real estate income and will be taxed as income from securities. 


If you have invested in shares/financial securities of French companies and you receive dividends then this income will not be taxable in France but in the Emirates and will therefore by definition be exempt from taxes.

There is still an exception that will be found for all types of income treated by the Convention – if these dividends are linked to a professional activity carried out in France (industrial, commercial or even independent profession) then in this case, the taxes on these dividends will be payable in France.  


If you are a tax resident in the Emirates and you receive interest on French debts you are taxed on this income in the Emirates and you are then exempt from it like dividends. 

As such, if the income from French claims is linked to a professional activity in France then the latter will be taxable in France.


All remuneration resulting from an intellectual and / or industrial property right (e.g. copyright, patent, trademark, manufacturing process, computer coding etc.) will be paid in the beneficiary’s country of residence.

Thus, if you are a tax resident in the Emirates and you receive a remuneration from royalties, you will not pay any tax in France with one exception – if these royalties come from a professional activity carried out in France through a permanent establishment.

Capital gains [9]

If you are resident in the Emirates but you sell a property not related to a professional activity or if you sell shares whose assets are composed of more than 80% real estate properties in France, you will then be liable for taxes on French capital gains.

On the other hand, if you sell securities these gains will only be taxable in the U.A.E unless they are related to one of your professional activities in France.

However, regarding securities, there is an exception: if the shares sold represent at least 25% of the capital of a French company then the tax on the capital gain of these shares will be payable in France.

Self-employed [10]

If you are a tax resident in the Emirates but you continue to exercise a self-employment profession in France, you will continue to pay taxes on the income from this activity. 

On the other hand, if you carry out your independent activity through a fixed base or a permanent establishment in the Emirates then this income will be exempt from tax in France. 

Income of employees [11]

If you are a tax resident in the U.A.E and you receive income from paid employment in that country then you are exempt from French tax.

There is still an exception – if you are employed by an Emirati company but you physically work in France, then French authorities reserve the right to tax you on income from emirati sources unless the following three requirements are cumulatively met:

– you stay in France for less than 183 days during the tax year concerned; and
your employer is not a French resident; and
– the burden of remuneration is not borne in France (through a permanent establishment for example)

French private sector pension  [12]

Regarding pensions and remuneration paid for salaried work prior to the change of tax residence in France (excluding work in the civil service), they are in principle non-taxable in France.

However, pensions paid under social security legislation in France are taxable in France, which is the case for example of voluntary insurance against old-age risk.

Real estate wealth tax[13]

If you are a tax resident in the U.A.E and you own real estate not related to a professional activity in France, the amount of which makes you liable for wealth tax in France, but you will have to pay it if and only if the value of your French real estate is higher than:

the value of French shares listed on the stock exchange or of an approved investment company (covering all credit institutions including French banks not listed on the stock exchange)[14]; and
the value of the French claims (towards the State or companies) that you hold. 
These shares and claims must also be held for more than six months to allow such an exemption from real estate wealth tax. 


Regarding the inheritance of real estate properties, regardless of your tax residence, this will be taxable in the State where the property is located.

Regarding securities linked to a professional activity within a State, this will be attached to the law of inheritance of such activity. 

Finally, about other securities subject to testamentary provisions to the contrary, the property will be taxed in the State of which the deceased was a resident at the time of death. 

Exchange of information [16]

The two States have undertaken the commitment to exchange information that is not limited to the taxes covered by the Convention.

[1]It must then be understood a contrario that the taxes not covered by the Convention must be paid jointly in France and the Emirates.

[2]Article 2 of the Convention

[3]Articles 4 A and 4B of the General Tax Code

[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 Sep. 2012, § 20.

[15] Article 17 of the Convention

[16] Article 21 A of the Convention


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