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January 13, 2009
HP-1350
United States, France Sign Protocol to Income Tax Treaty
Washington - The Treasury Department today announced that United States Ambassador to France Craig Roberts Stapleton and French Minister of Finance Christine Lagarde signed a protocol updating the current income tax treaty between the United States and France.
In a ceremony held in Paris, the two officials signed a Protocol that makes several significant changes to the existing U.S.-France income tax treaty. The agreement provides for the elimination of source-country taxation of certain direct dividends as well as the elimination of source-country taxation of cross-border royalty payments.
The Protocol also provides for mandatory arbitration of certain cases that cannot be resolved by the competent authorities within a specified period of time, strengthens the treaty's provisions preventing so-called treaty shopping (the inappropriate use of a tax treaty by third-country residents), and updates the rules for the exchange of taxpayer information between the tax authorities of each country.
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