How do double tax treaties work for France — UK and Australia examples?

France has a network of bilateral double tax treaties (conventions fiscales) with over 120 countries, including the UK and Australia. These treaties exist to prevent the same income from being taxed twice — once in France and once in the country where the income arises or where the taxpayer is resident.

The France-UK treaty (signed 2008, in force 2010) generally allocates primary taxing rights based on the source of income: UK employment income is taxed in the UK, French rental income is taxed in France. For French residents receiving UK pension income, France taxes it with a credit for UK tax paid. Dividends are generally taxed at source (15% withholding in France, credited in the UK), then the country of residence taxes the net with a credit. Tie-breaker residency rules follow the OECD model.

The France-Australia treaty operates similarly. Australian residents receiving French rental income pay tax in France; the Australian tax return includes the income but a foreign tax credit eliminates double taxation. French residents with Australian superannuation distributions or salary may need to file in both countries, claiming credits.

In practice, to avoid double taxation you must file in the country of residence, declare foreign income, and claim the applicable foreign tax credit or exemption under the treaty. Treaty provisions override domestic law where they are more favourable.