The tax treaty between France and the United Arab Emirates, signed in Abu Dhabi on 19 July 1989 and amended by the protocol of 6 December 1993 (decrees No. 90-631 of 13 July 1990 and No. 95-798 of 14 June 1995), is the cornerstone of the elimination of double taxation between the two States. Its application requires combined expertise of both tax systems.
The France-UAE Tax Treaty, signed on July 19, 1989, provides a framework for allocating taxing rights between the two states, which articulates with each state's domestic tax law to determine tax liability. Article 4(2) sets out successive tie-breaker criteria (permanent home → centre of vital interests → habitual abode → nationality → mutual agreement) to address dual-residency situations, though the practical effect of such allocation depends on the prior determination of residency under each State's domestic law. The actual tax outcome depends on the applicable wording, the nature of the income, treaty residence and the domestic law of each State. Transferring one's tax domicile to the UAE — a State outside the European Economic Area with no mutual assistance agreement with France for tax recovery — excludes the automatic deferral of the French exit tax (Article 167 bis, IV of the French Tax Code): deferral is only available upon request, with guarantees (Article 167 bis, V). Reporting obligations also apply, notably the declaration of foreign bank accounts (Article 1649 A of the French Tax Code).
Signed at Abu Dhabi on 19 July 1989, the France-UAE tax treaty was published in French law by decree No. 90-631 of 13 July 1990 (approved by law No. 90-333 of 10 April 1990) and entered into force on 1 July 1990. It was amended by an avenant signed on 6 December 1993, published by decree No. 95-798 of 14 June 1995 (approved by law No. 94-881 of 14 October 1994), which entered into force on 1 June 1995.
The treaty applies to individuals and legal entities that are residents of France or of the United Arab Emirates, or of both States (Article 1). On the French side, it covers the European and overseas départements of the Republic (Article 23(1)); it does not extend, absent an extension agreement by exchange of diplomatic notes, to other French overseas collectivities (Article 23(2)). On the Emirati side, it covers the entire territory of the federation (Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah, Fujairah).
In France, the treaty has an authority superior to that of domestic statute law (French Constitution of 4 October 1958, Article 55). Since the Finance Act for 2025 (Law No. 2025-127 of 14 February 2025, Article 83), Article 4 B of the French Tax Code (CGI) expressly enshrines this primacy: a person regarded as a resident of the UAE within the meaning of the treaty cannot be considered as having their tax domicile in France under domestic law. Case law nevertheless requires that the taxpayer's position first be established under domestic law before the treaty tie-breaker criteria are applied (subsidiarity principle: Conseil d'État, 11 April 2008, No. 285583).
Article 4(1) of the treaty defines residence asymmetrically: on the French side, a resident is any person liable to tax in France by reason of domicile, residence, place of management or any other criterion of a similar nature; on the Emirati side, any person who is domiciled, established or has its place of management in the UAE — with no requirement of liability to tax. Where an individual is a resident of both States under those definitions, Article 4(2) provides subsidiary tie-breaker criteria, which must be examined successively, in order, and not alternatively (Conseil d'État, 29 October 2012, No. 346641).
| Criterion | Priority Order | Application |
|---|---|---|
| Permanent home (Art. 4(2)(a)) | 1 | Dwelling available to the person on a durable basis, at all times (owned, rented or made available) |
| Centre of vital interests (Art. 4(2)(a)) | 2 | State with which personal and economic ties are closest |
| Habitual abode (Art. 4(2)(b)) | 3 | Frequency, duration and regularity of stays (Conseil d'État, 16 July 2020, No. 436570) |
| Nationality (Art. 4(2)(c)) | 4 | If habitual abode in both States or in neither |
| Mutual agreement (Art. 4(2)(d)) | 5 | The competent authorities of the two States settle the question by mutual agreement |
A person with a permanent home available in both France and the UAE is deemed resident of the State with which their personal and economic ties are closest — the centre of vital interests (Treaty, Art. 4(2)(a)). If that centre cannot be determined, residence is allocated to the State of habitual abode, assessed by reference to the frequency, duration and regularity of stays, without it being necessary for their total duration to exceed half the year (Conseil d'État, 16 July 2020, No. 436570). The taxpayer must document each criterion.
The treaty enumerates income categories and determines, for each, whether the taxing right belongs to the source State or the residence State. Since the protocol of 6 December 1993, in force since 1 June 1995, dividends, income from debt-claims and royalties are taxable exclusively in the beneficial owner's State of residence, with no withholding tax.
Salaries, wages and similar remuneration from private employment are taxable in the State where the employment is exercised (Treaty, Art. 13(1)). By exception, they remain taxable only in the employee's State of residence if three conditions are met: presence not exceeding 183 days in the other State during the relevant fiscal year, an employer who is not a resident of that other State, and remuneration not borne by a permanent establishment or fixed base situated there (Treaty, Art. 13(2)). For a French resident exercising employment in the UAE, Article 19(1) grants a tax credit equal to the corresponding French tax, without making that credit conditional upon the salary being effectively taxed in the UAE (Conseil d'État, 20 March 2023, No. 452718).
The profits of an enterprise of one State are taxable only in that State, unless it carries on business in the other State through a permanent establishment situated there (Treaty, Art. 6(1)). The permanent establishment is defined in Article 4 A, created by the 1993 protocol: a fixed place of business — place of management, branch, office, factory, workshop — and a building or assembly site lasting more than six months (Treaty, Art. 4 A(3)). Income from independent professions is taxable only in the State of residence, unless the professional habitually has a fixed base in the other State (Treaty, Art. 12).
Since the protocol of 6 December 1993, dividends (Treaty, Art. 8), income from debt-claims (Treaty, Art. 9) and royalties (Treaty, Art. 10) are taxable only in the beneficial owner's State of residence: the 5% withholding tax previously applicable to certain dividends and interest was abolished with effect from 1 June 1995. These items nevertheless become taxable in the source State, under the business profits or independent professions rules, where they are effectively connected with a permanent establishment or fixed base situated there (Treaty, Art. 8(5), 9(4) and 10(3)). The practical effect depends on the exact qualification of the income, treaty residence and the domestic law of each State: a case-by-case analysis remains necessary.
Gains from the alienation of immovable property are taxable in the State where the property is situated (Treaty, Art. 11(1)(a)), as are gains on shares of companies whose assets consist of more than 80% of immovable property or rights relating thereto (Treaty, Art. 11(1)(b)). Gains on other assets are taxable only in the seller's State of residence (Treaty, Art. 11(2)), except for disposals of substantial participations — shares entitling the holder, directly or indirectly, to more than 25% of a company's profits — which are taxable in the State of which the company is a resident (Treaty, Art. 11(3)). Caution: for a French resident selling property located in the UAE, the tax credit under Article 19(1) equals the tax actually paid in the UAE, capped at the corresponding French tax; absent any UAE taxation of the gain, the French tax remains fully due.
The treaty provides for conventional mechanisms for allocating taxing rights and eliminating double taxation. Their practical effect depends on the nature of the income, its qualification, the treaty residence and the circumstances of the case.
Article 19(1) distinguishes two mechanisms. For real-estate gains and disposals of substantial participations (Treaty, Art. 11(1) and (3)), and for income derived through a permanent establishment or fixed base situated in the UAE for principally tax-driven purposes, the credit equals the tax paid in the UAE, capped at the corresponding French tax. For all other income, the credit equals the corresponding French tax — a method equivalent to exemption with progression — and is not conditional upon the income being effectively taxed in the UAE (Conseil d'État, 20 March 2023, No. 452718). Foreign-source income and the corresponding credits are reported on French form No. 2047.
On the Emirati side, Article 20 provides that double taxation is avoided in accordance with UAE legislation. As the UAE levies no personal income tax, the question does not arise in practice for individuals resident in the UAE. For companies, the 9% Corporate Tax (above AED 375,000 of taxable income, Federal Decree-Law No. 47 of 2022, Article 3) contains its own foreign tax credit mechanism under domestic law.
Where a person resident or established in the UAE remains domiciled in France for tax purposes under French domestic law, or is a subsidiary controlled directly or indirectly as to more than 50% by a company whose place of management is in France, that person's income remains taxable in France notwithstanding any other provision of the treaty, France then crediting any tax levied by the UAE (Treaty, Art. 19(2)). This clause does not apply to individuals who are UAE citizens. Its articulation with the treaty primacy now enshrined in Article 4 B of the French Tax Code (Law No. 2025-127 of 14 February 2025, Article 83) calls for a case-by-case analysis.
Contrary to a widely held misconception, the material scope of the France-UAE Convention of 19 July 1989 (published in France by décret n° 90-631 of 13 July 1990) is not limited to income taxes. The taxes covered by the Convention, set out in its Article 2, include income taxes, wealth tax and succession duties, as confirmed by the French tax administration's published guidance (BOFiP, série BOI-INT-CVB-ARE). The practical articulation of these rules with each State's domestic law must be examined on a case-by-case basis.
Article 16 A, created by the protocol of 6 December 1993 with retroactive effect from 1 January 1989, allocates taxing rights over wealth: a resident of one State is in principle taxable only in their State of residence (Treaty, Art. 16 A(4)). Immovable property situated in the other State nevertheless remains taxable there, unless the resident holds financial investments in that State (notably listed shares and public debt-claims) of an overall value at least equal to that of the immovable property, held on a permanent basis — more than eight months during the calendar year preceding the chargeable event (Treaty, Art. 16 A(1) and (6)(a); in practice a six-month period is accepted under the most-favoured-nation clause of Art. 16 A(5)). On the French side, since the ISF was replaced by the IFI on 1 January 2018 (Articles 964 et seq. of the CGI), this allocation only concerns real-estate wealth. The United Arab Emirates levies no wealth tax under its domestic law, so the allocation rule produces no actual UAE taxation.
Article 17 of the Convention allocates taxing rights over successions: immovable property is subject to succession duties only in the State where it is situated (Treaty, Art. 17(1)); movable property effectively connected with a permanent establishment or fixed base is taxable only in the State where that establishment is situated (Treaty, Art. 17(2)); all other movable property, tangible and intangible — including securities and deposits — is taxable only in the State of which the deceased was a resident at the time of death (Treaty, Art. 17(3)). On the French side, assets taxable in the UAE under the Convention are exempt in France, subject to the effective-rate rule (Treaty, Art. 19(4)), by derogation from the territoriality rules of Article 750 ter of the CGI. Because the United Arab Emirates levies no succession duties under its domestic law, the mechanism operates essentially unilaterally on the French side. Gifts, by contrast, are not covered by the Convention (Treaty, Art. 2): French domestic rules apply in full (Articles 750 ter and 784 A of the CGI). A case-by-case analysis in light of the administrative guidance (BOFiP, BOI-INT-CVB-ARE) remains necessary.
Recent international tax developments — the OECD/G20 Pillar Two global minimum tax framework, the BEPS multilateral instrument and the OECD Common Reporting Standard — frame the application of the 1989 Treaty without amending its text. The UAE has implemented the Domestic Minimum Top-up Tax through Cabinet Decision No. 142/2024 (effective for fiscal years commencing on or after 1 January 2025) and is participating in the CRS automatic exchange of information.
The OECD/G20 Inclusive Framework agreement of October 2021 introduces a 15% minimum effective tax rate for multinational groups with consolidated revenue of EUR 750 million or more. France transposed the GloBE rules through Articles 223 VJ et seq. of the CGI, enacted by the Finance Act for 2024. The UAE introduced a 15% Domestic Minimum Top-up Tax through Cabinet Decision No. 142 of 2024, applicable to financial years starting on or after 1 January 2025 and limited to entities that are members of multinational groups meeting that threshold. In practice, for individual structures and small non-consolidated companies, the UAE Corporate Tax remains at the standard 9% rate above the AED 375,000 threshold (Federal Decree-Law No. 47 of 2022, Article 3), with no top-up tax.
The 1989 Convention (decree of publication n° 90-631 of 13 July 1990) contains neither a general anti-abuse clause, nor a Limitation on Benefits clause, nor a Principal Purpose Test in the BEPS Multilateral Instrument sense — the United Arab Emirates not being a party to the MLI for this Convention. The applicable anti-abuse framework is therefore drawn from French domestic law: tax abuse of right by fraud against the law (article L. 64 LPF) or arrangement with a principally tax-driven purpose (article L. 64 A LPF), together with targeted regimes such as article 123 bis CGI on entities interposed in low-tax jurisdictions. The EU Anti-Tax Avoidance Directive (Directive (EU) 2016/1164, "ATAD") does not apply to the United Arab Emirates, which is a third State to the European Union; ATAD only binds entities subject to corporate income tax within EU Member States. For UAE-expatriate structures, the analysis focuses on effective tax residency (article 4 B CGI), economic substance, and the combined application of the bilateral treaty with French general-law anti-abuse rules.
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