US-France Tax Treaty Guide 2026: Dividends, CSG and FTC

The Convention Between the United States and France for the Avoidance of Double Taxation was signed on August 31, 1994, and substantially amended by the 2009 Protocol. The Protocol brought the US-France treaty in line with contemporaneous US treaties — adding a 0% dividend tier for qualifying parent-subsidiary relationships and refining the Limitation on Benefits (LOB) article.

The US-France bilateral tax relationship is one of the most active in the US treaty network, given France's large expatriate community in the US and the significant numbers of Americans who retire to or work in France. France is also a major source of US-bound investment and cultural-economy royalties (film, music, publishing).

The treaty is generally comprehensive and well-structured — but individuals should understand two points. First, French social charges (CSG — Contribution Sociale Généralisée, and CRDS — Contribution pour le Remboursement de la Dette Sociale — plus a 7.5% solidarity levy, totalling 17.2%, or 18.6% on most investment income from 2026) are not taxes covered by the treaty. However, the IRS stated in 2019 that it will no longer challenge CSG and CRDS as creditable foreign income taxes under IRC 901, so they generally count toward the foreign tax credit. Second, the foreign tax credit is capped at the US tax on the same income, so when French tax exceeds US tax the excess is not refunded and the practical burden is the higher French rate. The 7.5% solidarity levy is not addressed by the IRS directive.

Key Withholding Rates Under the US-France Treaty

The rate structure following the 2009 Protocol:

France's PFU (Prélèvement Forfaitaire Unique): Since 2018, France taxes most investment income under a flat tax system — the PFU or 'flat tax' — at 31.4% total from 2026 (12.8% income tax component + 18.6% social charges; 30% before 2026). For non-residents receiving French-source income, only the income tax component typically applies at withholding stage. The treaty reduces the withholding rates as shown above on the income tax component. Social charges (CSG/CRDS) are handled separately.

CSG/CRDS and the US Foreign Tax Credit: What the IRS Now Accepts

French social charges are not covered by the treaty, but they are not necessarily a double-taxation trap for US persons. This matters for any US person (citizen, Green Card holder, or substantial presence resident) with French income.

What Are CSG and CRDS?

The Contribution Sociale Généralisée (CSG) and Contribution pour le Remboursement de la Dette Sociale (CRDS) fund French social security programmes. On most capital income they are levied together with a 7.5% solidarity levy (prélèvement de solidarité), for a total of 17.2%, or 18.6% on most investment income from 2026 (CSG 10.6% + CRDS 0.5% + 7.5% solidarity):

• Employment income: 9.7% (CSG and CRDS)
• Replacement income (unemployment, sick pay): reduced rates depending on the type of income
• Investment income (dividends, interest, gains on securities): 18.6% from 2026 (17.2% before; life insurance and some savings products stay at 17.2%)
• Rental income: 17.2%

Are CSG/CRDS Creditable Against US Income Tax?

The US Foreign Tax Credit (FTC) under IRC 901 allows US persons to credit foreign income taxes (or taxes in lieu of income taxes). The IRS position changed in 2019:

• IRS directive: LB&I-04-0819-007 (August 2, 2019) tells examiners they will no longer challenge FTC claims for CSG and CRDS on the basis that the US-France Totalization Agreement applies to them, nor assert that CSG and CRDS are not creditable income taxes. The IRS practice unit on French foreign tax credits (updated 2025) confirms the IRS no longer maintains that CSG and CRDS are ineligible under IRC 901. The change rests on a shared US-France understanding in 2019 that CSG and CRDS are not covered by the Totalization Agreement.
• Treaty coverage: The credit comes from IRC 901, not the treaty. The treaty's Article 2 lists French income tax, company tax, the tax on salaries and the wealth tax, and does not name CSG or CRDS; Article 24's credit and re-sourcing rules for US citizens resident in France refer only to French income tax as defined there.
• 7.5% solidarity levy: The directive names only CSG and CRDS. It does not address the prélèvement de solidarité, so whether it is creditable is unsettled. Treat it as potentially non-creditable and confirm with a cross-border adviser.

The 2019 directive is an examination-policy directive, not a statute or regulation, and a credit is still subject to the normal limitation (US tax on the same category of income), basket rules and carryover rules.

The Practical Impact: Example

Assumptions: a US citizen resident in France receives $100,000 of French-source qualified dividends taxed under the PFU, has no other income, falls within the 15% US qualified dividend rate, claims the foreign tax credit in the passive category, and ignores the net investment income tax (NIIT), state tax and the rate-adjustment worksheet details:

• French income tax (12.8% PFU income component): $12,800 — creditable
• CSG/CRDS (11.1% of the 18.6% from 2026): $11,100 — creditable under the IRS 2019 position
• 7.5% solidarity levy: $7,500 — treatment unsettled; conservatively treated as non-creditable
• US tax before credit at 15%: $15,000. Creditable French tax of $23,900 exceeds this, so the credit is capped at about $15,000 and US regular income tax is roughly $0. The unused credit of about $8,900 may be carried back one year or forward ten years in the passive category, but is only useful against future US tax on foreign-source passive income.
• The solidarity levy's status does not change the US result in this example, because creditable French tax already exceeds the US tax on the dividends.
• Total tax: about $31,400 (France, 31.4%) plus any US NIIT, which is generally not offset by the foreign tax credit.

The practical effect for most Americans in France with investment income is therefore not additional US tax on top of French tax, but that French tax (31.4% on most investment income from 2026) usually exceeds the US rate, and the excess credit cannot be refunded. Results differ for ordinary income taxed at higher US rates, other income baskets, and capital gains, so run your own figures.

Partial Relief for EU/EEA Non-Residents

French law historically exempted EU/EEA residents from CSG/CRDS on certain French-source income. Post-Brexit, UK residents may have lost this exemption (not verified here). US residents in France (tax residents) face the full rate (18.6% on most investment income from 2026).

Employment Income and the 183-Day Rule

Article 15 of the US-France treaty allocates employment income taxation under the standard OECD framework:

US Employees on Assignment in France

A US employee working in France for a US employer owes French income tax on French-source wages. Under Article 15(2), a temporary assignment of fewer than 183 days in a 12-month period is exempt from French income tax, provided: the employer is not French-resident, and the wages are not borne by a French permanent establishment. This is the standard 183-day exemption.

French Employees Working in the US

French residents working in the US owe US income tax on US-source wages. France taxes residents on worldwide income but allows a foreign tax credit for US taxes paid, generally preventing double taxation of employment income.

Impatriate Tax Regime (France's Answer to Beckham Law)

France offers an impatriate exemption (Régime des impatriés) for employees hired from abroad or seconded to France. Qualifying employees can exempt 30% of their French-source salary from French income tax (plus certain specific additional payments) for up to 8 years from the year of arrival. This is less generous than Spain's Beckham Law (24% flat rate) but still significant for relocating executives. The impatriate regime does not reduce the CSG/CRDS obligation, although CSG/CRDS paid are generally creditable for US purposes under the IRS 2019 position described above.

Pensions and Retirement Income Under the US-France Treaty

Article 18 (Pension, Annuities, Alimony) and Article 19 (Government Service) allocate pension taxation between the US and France.

Social Security Benefits

Under Article 18(1) of the treaty (as replaced by the 2004 Protocol), payments under the social security legislation of one country to a resident of the other are taxable only in the paying country. US Social Security benefits received by a French resident are therefore taxable only in the United States (not in France).

Conversely, French social security benefits received by US residents are taxable only in France.

Private and Occupational Pensions

Under Article 18(1) as replaced by the 2004 Protocol, pension distributions and similar remuneration arising in one country (paid by a pension arrangement established there) to a resident of the other are taxable only in the country where they arise. A US IRA or 401(k) distribution paid to a resident of France is therefore taxable only in the US under the treaty, not in France.

US citizens are taxed on worldwide income regardless of where they live — a US citizen retiree in France owes US federal income tax on IRA/401(k) distributions regardless of the treaty, because the treaty does not override US citizenship-based taxation. Confirm with a cross-border adviser how France treats the same income and which credits apply.

French Pension for American Retirees

An American who worked in France for years may have contributed to the French state pension (Retraite) and an occupational pension. Under Article 18(1) as replaced by the 2004 Protocol, pension distributions arising in France (paid by a French pension arrangement) to US residents are taxable only in France. Confirm the withholding and refund procedure with your pension institution and a cross-border adviser.