Focus on the tax treaty between France and the Emirates - its impacts for individual residents of the U.A.E.
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Tax treaty between France and the United Arab Emirates: the reference guide for expatriates, entrepreneurs, and investors
Are you moving to Dubai or the United Arab Emirates? Find out how the French-Emirati tax treaty works, the rules regarding tax residency, double taxation, and the consequences on your income and assets.
Tax treaty between France and the United Arab Emirates: understanding the rules applicable to your expatriation
Expatriation to the United Arab Emirates has emerged, in recent years, as a preferred option for many French entrepreneurs, executives, investors, and employees. The country's economic stability, international appeal, and tax environment lead new taxpayers every year to consider transferring their tax residence to Dubai or Abu Dhabi.
However, this development is accompanied by a recurring question: what will be the tax consequences of relocating to the United Arab Emirates?
The answer can never be boiled down simply to the absence of income tax in the Emirates.
In practice, transferring an international tax residence requires simultaneously assessing the rules of French tax law, the regulations applicable in the United Arab Emirates, as well as the provisions of the tax treaty concluded between the two States.
Yet, this treaty is often misunderstood.
It is common to think that obtaining a residence visa, creating a company under UAE law, or spending more than 183 days in Dubai is sufficient to end all taxation in France. Conversely, some taxpayers believe they will systematically remain taxable in France as long as they retain assets or economic interests there.
Neither of these assertions can be accepted as a general rule.
The tax treaty between France and the United Arab Emirates does not aim to eliminate tax or to allow taxpayers to freely choose the State in which they wish to be taxed. Its role is to organize the distribution of taxing power between the two States when a single situation has connections to both, while avoiding double taxation situations and strengthening cooperation between tax administrations.
Its application, however, relies on an essential preliminary step: determining tax residence.
Before examining the rules applicable to real estate income, dividends, professional remuneration, or capital gains, it is necessary to identify the State in which the taxpayer is considered a tax resident. The application of all treaty provisions will depend on this analysis.
The purpose of this article is to explain how the French-Emirati tax treaty works, the criteria used to determine tax residence, and the main consequences of this treaty for individuals, entrepreneurs, and investors with interests in France and the United Arab Emirates.
Why is the Franco-Emirati tax treaty essential?
The tax treaty concluded between France and the United Arab Emirates was signed on July 19, 1989. It entered into force on July 1, 1990, was amended by an agreement in 1993, and currently applies taking into account the adaptations resulting from the OECD Multilateral Convention (MLI).
Its objective is twofold.
On one hand, it prevents the same income from being taxed twice when France and the United Arab Emirates are simultaneously liable to exercise their tax jurisdiction.
On the other hand, it sets rules designed to prevent situations of non-taxation resulting from the inappropriate use of differences between domestic laws, in accordance with the international standards developed by the OECD.
Contrary to popular belief, the treaty therefore does not grant an autonomous tax benefit.
It does not create a right to exemption and does not override the rules provided by domestic laws. It only intervenes when the same situation potentially falls under both States and it is necessary to determine which one has the power to tax an income, an asset, or a capital gain.
This distinction is fundamental.
In practice, many disputes arise from a confusion between the transfer of tax residence and the tax consequences of this transfer. However, these two questions obey distinct legal reasonings.
In the event of dual tax residence, how does the treaty decide between the two States?
One of the main difficulties encountered in international taxation lies in situations of dual tax residence. It is not uncommon for a person to simultaneously meet the residence criteria provided for by French legislation and those adopted by the United Arab Emirates.
This situation particularly affects taxpayers who settle in Dubai while maintaining significant ties in France: a spouse or children residing there, significant real estate assets, management functions within a French company, or an economic activity carried out partially on French territory.
In such an event, each of the two States could, in application of its domestic law, claim the status of tax resident. Without a coordination mechanism, this situation would be likely to lead to double taxation that is particularly penalizing.
It is precisely to prevent this type of conflict that the France-UAE Tax Treaty provides tie-breaker rules.
Contrary to a sometimes widespread idea, this is not a choice left to the taxpayer. The France-UAE Tax Treaty establishes an order of analysis that must be respected.
The first criterion is that of the permanent home. It is necessary to identify the State in which the taxpayer has housing allowing them to reside in a stable manner. If a permanent home exists in both countries, the analysis continues.
The France-UAE Tax Treaty then uses the criterion of the center of vital interests, which is often the decisive factor. This requires assessing all of the taxpayer's personal and economic ties.
In practice, tax administrations notably examine:
the place of residence of the spouse and children;
the country in which the professional activity is mainly carried out;
the source of income;
the place of wealth management;
the location of the main investments;
the responsibilities exercised within companies;
more broadly, all elements allowing for the identification of the effective center of personal and economic life.
This is not an exhaustive list. No single criterion is, by itself, decisive. French administrative courts regularly reiterate that tax residence results from a comprehensive assessment of the taxpayer's situation.
When the center of vital interests still does not allow a decision, the France-UAE Tax Treaty provides other successive criteria, notably the habitual place of abode and, as a last resort, nationality.
This method explains why obtaining a UAE residency visa or a Tax Residency Certificate is not necessarily sufficient to end French tax residency. These elements constitute important indications, but they never exempt one from a complete analysis of the situation.
Quels revenus restent imposables en France après une expatriation aux Émirats ?
Transferring your tax residence to the United Arab Emirates does not mean that all of your income will henceforth escape any taxation in France.
One of the main contributions of the France-UAE Tax Treaty is precisely to determine, for each category of income, which State has the power to tax it.
It is therefore essential to distinguish tax residence from the place where income is taxed. A person can perfectly be considered a tax resident of the UAE while remaining taxable in France on certain French-source income.
This distinction is often the source of many misunderstandings.
Real estate income
Income from real property follows a particularly stable principle in international tax law: it is, in principle, taxable in the State where the property is located.
Thus, a taxpayer settled in Dubai who keeps a rented flat in France will generally continue to be taxed in France on the rents received.
The France-UAE Tax Treaty does not call this rule into question. On the contrary, it confirms the jurisdiction of the State where the property is located.
This logic also applies to capital gains realized on the sale of real estate located in France, subject to the special provisions provided for by the France-UAE Tax Treaty and by domestic law.
The reverse situation follows the same reasoning. A French tax resident who acquires a rental property in Dubai falls under Article 5 of the France-UAE Tax Treaty: rents are taxable in the United Arab Emirates, the State where the property is located. This income must nevertheless be declared in France (and it will count towards the calculation of the marginal tax rate and French global income), where the France-UAE Tax Treaty neutralizes double taxation by granting a tax credit equal to the corresponding French tax.
With regard to real estate wealth tax, the logic differs according to the direction of the investment:
- A French tax resident owning property in the United Arab Emirates remains taxable in France on this property as soon as their global real estate assets exceed 1.3 million euros. Since the UAE does not levy any wealth tax, no conflict of taxation arises here: France fully exercises its right to tax. The reverse situation is more subtle.
- A UAE tax resident owning real estate in France may, in certain cases, escape the IFI (real estate wealth tax) on this property. Article 16 of the France-UAE Tax Treaty indeed provides that French real estate remains taxable in France unless its value remains lower than that of certain French financial assets held by the same taxpayer.
Two nuances deserve to be pointed out. First, these financial assets must have been held for more than eight months during the previous year: a circumstance-based holding, carried out just before the tax event, is not sufficient. Secondly, the taxpayer must be in a position to justify this in their wealth tax return.
For example, a UAE resident owning a 2 million euro Parisian apartment, who has held a portfolio of listed French shares worth 3 million euros for several months, may, under these conditions, not be subject to the IFI on their property.
However, there is a qualification: placing one's real estate assets in a company is not enough to escape this classification. The France-UAE Tax Treaty neutralizes this type of setup by treating shares in a company whose assets consist of more than 50% real estate as real estate, except when these assets are allocated to the company's own operations.
Dividends, interest and other financial income
Income from movable property is subject to a more nuanced treatment.
The France-UAE Tax Treaty provides specific rules concerning dividends, interest and royalties in order to prevent the same income from being taxed under conditions incompatible with the objectives pursued by both States.
Depending on the nature of the income, its origin as well as the status of the beneficiary, the power to tax may belong exclusively to the State of residence or be shared between the State of source and the State of residence, within the limits set by the France-UAE Tax Treaty.
In practice, an individualized analysis remains essential. It would be legally inaccurate to claim that a UAE tax resident will never be taxed in France on French-source financial income, especially since the introduction of a withholding tax (refundable under conditions) on dividends since the implementation of the 2025 Finance Act on January 1, 2026.
The examination of these flows constitutes one of our firm's daily lines of work. Exact nature of the income, status of the beneficial owner, coordination between domestic law and treaty provisions: each of these parameters is likely to modify the applicable tax treatment. Do not hesitate to contact us for a study of your situation.
Professional income
Remuneration received in the context of an employed or self-employed activity requires particular attention.
In international matters, the place of establishment of the employer or the nationality of the taxpayer are not, on their own, sufficient to determine the State competent to tax the income.
The conditions of actual exercise of the activity, the duration of presence in each State as well as the provisions of the France-UAE Tax Treaty must be examined.
Article 13 of the France-UAE Tax Treaty, dedicated to dependent professions, establishes the following principle in this regard: a salary is in principle taxable in the employee's State of tax residence (with a possibility nonetheless of implementing attendance fees on a case-by-case basis).
However, this rule changes when the employee physically exercises their professional activity in another State. In this case, the country in which the work is actually performed may also have the right to tax the corresponding remuneration.
Nevertheless, when an employee who is a resident of one State works temporarily in another State, their salary may remain taxable solely in their State of residence if three conditions are met:
- they stay in the other State for less than 183 days during the period provided for by the France-UAE Tax Treaty;
- their salary is paid by an employer who is not a resident of the State in which they work temporarily;
- the cost of their remuneration is not borne by a permanent establishment or a local structure of their employer located in that other State.
However, there are exceptions to this principle.
The first is commonly presented as the 183-day rule. It maintains taxation solely in the employee's State of residence when three conditions are cumulatively met: the stay in the other State does not exceed 183 days in the tax year in question, the remuneration is paid by an employer who is not a resident of that other State, and its burden is not borne by a permanent establishment or a fixed base that the employer has there. It is enough for just one of these conditions to be lacking for taxation to revert to the State where the activity is exercised.
Other exceptions are provided for, in particular for teachers and researchers, who are taxed in their State of origin for a maximum period of twenty-four months, as well as for remuneration linked to employment exercised aboard a ship or aircraft operated in international traffic. Pensions, public remuneration and sums received by students and trainees are subject to separate provisions.
The situation is often even more complex for company directors and entrepreneurs.
Setting up a company in the United Arab Emirates does not, on its own, rule out all French taxation. Tax administrations focus on assessing the reality of economic activity (the famous economic substance or permanent establishment): place of strategic decision-making, location of clients, actual exercise of management functions or even the existence of a permanent establishment.
These issues are now among the main subjects of tax audits in terms of international mobility.
Les erreurs les plus fréquentes lors d'une expatriation vers les Émirats arabes unis
Over the years, the tax attractiveness of the United Arab Emirates has given rise to many misconceptions. Some are maintained by incomplete information, others by a misinterpretation of international tax treaties.
In practice, most of the difficulties encountered by taxpayers do not originate in the France-UAE Tax Treaty itself, but in a poor understanding of how it works or how it applies to French domestic law.
Thinking that a residency visa is enough to become a non-resident for French tax purposes
This is probably the most common mistake.
Obtaining a residency visa or an Emirates ID is an administrative condition that allows you to live in the United Arab Emirates. On its own, it does not determine tax residency under French law.
The French tax administration does not focus solely on administrative documents. It examines the reality of the taxpayer's situation.
Thus, a person who keeps their family home in France, continues to carry out an essential part of their professional activity there, or maintains the center of their economic interests there may still be considered a French tax resident, regardless of their administrative or internal tax status in the Emirates.
In other words, tax residency is a matter of facts, not formalities.
Confusing the absence of tax in the Emirates with the absence of taxation in France
The United Arab Emirates does not levy personal income tax.
This characteristic sometimes leads some taxpayers to think that a transfer of tax residency automatically results in a total exemption from their French tax obligations.
The reality is more nuanced.
A tax resident of the Emirates may well remain taxable in France on certain French-source income, particularly real estate income or, in certain situations, income from movable assets or professional income.
The absence of tax in the State of residence does not have the effect of suppressing the right to tax granted to France by the France-UAE Tax Treaty and/or French domestic tax law.
Keeping the center of one's economic interests in France
The concept of the center of economic interests is often underestimated.
However, it plays an essential role in tax audits concerning expatriations.
The administration may notably examine:
the primary source of income;
the location of the main investments;
corporate mandates and where they are exercised;
the companies actually managed;
the place where important economic decisions are made;
the taxpayer's customary financial flows.
In some cases, a person physically resides in Dubai for several months of the year while continuing to manage all of their economic activities from France. Such a situation can lead the administration to challenge the reality of the transfer of tax residency.
It is therefore not enough to move your place of life; it is also necessary for your asset and professional organization to be consistent with this expatriation.
Neglecting to prepare for departure
An expatriation is not just about the day the plane takes off.
The tax consequences and declarations are often prepared several months in advance.
Departure can have an impact on the income tax return, the management of French companies, the holding of real estate assets, financial investments, life insurance contracts, or even the application of specific mechanisms such as the Exit Tax.
Since every situation is different, planning ahead generally avoids costly adjustments or subsequent disputes.
Why are tax audits related to expatriation increasing?
International mobility has been growing steadily for several years. At the same time, tax administrations have increasingly powerful cooperation tools at their disposal.
The automatic exchange of information between administrations, particularly banking information, enhanced reporting obligations, and international standards developed under the impetus of the OECD now allow States to have a much more complete view of taxpayers' asset and tax situations.
In this context, expatriations to low-tax jurisdictions naturally receive special attention.
This obviously does not mean that an expatriation to the United Arab Emirates is suspicious or irregular.
On the other hand, when a taxpayer claims to have transferred their tax residency, the administration is entitled to verify that this claim corresponds to an economic, family, and personal reality.
Audits therefore focus less on the existence of a visa or a lease agreement and more on the overall coherence of the situation: where does the person actually live? Where do they work? Where do they make decisions? Where are their main interests located?
This approach is consistent with the logic of the tax treaty itself, which always prioritizes the reality of facts over appearances.
The France-UAE Tax Treaty is never a substitute for a personalized analysis
The tax treaty between France and the United Arab Emirates is an essential legal framework for preventing double taxation. However, it does not automatically resolve all situations encountered in practice.
Every expatriation has its own specific features.
The applicable tax treatment depends, among other things, on the composition of assets, the nature of income, the activities carried out, the companies owned, the family organization, or the ties maintained with France.
Two taxpayers living in the same building in Dubai can therefore fall under completely different tax situations.
This is precisely why an individualized analysis remains essential before any expatriation or asset reorganization project.
Legal and tax planning not only secures the transfer of residency but also identifies potential reporting obligations, risks of recharacterization, and the consequences associated with retaining interests in France.
At Expats Law Firm, we assist individuals, entrepreneurs, and investors daily with their international mobility projects. Our approach is not to seek standardized solutions, but to build a strategy in compliance with the applicable legislation, the France-UAE tax treaty, and each client's asset goals.
Frequently asked questions about the tax treaty between France and the United Arab Emirates
Does a French national living in Dubai still pay taxes in France?
Not necessarily, but they do not automatically cease to be taxable in France solely by virtue of moving to the United Arab Emirates.
It must first be determined whether the taxpayer has indeed transferred their tax residence within the meaning of French law and the tax treaty. Next, the nature of the income received must be examined. Certain French-source income, particularly real estate income, may continue to be taxed in France even when the taxpayer is a tax resident of the UAE.
Is spending more than 183 days in Dubai enough to become a tax resident of the UAE?
No.
The 183-day threshold is often presented as a general rule when it is actually only one element among others.
The determination of tax residence depends on the criteria provided by domestic laws as well as, where applicable, the tie-breaker rules provided by the tax treaty. Family situation, economic ties, and the actual organization of personal life remain decisive elements.
Does a UAE residency visa guarantee the loss of French tax residency?
No.
A residency visa allows for legal stay in the United Arab Emirates but has no automatic effect on the classification of tax resident in France.
The French tax administration assesses the situation in light of the criteria set out in Article 4 B of the General Tax Code and, in the event of a conflict of residence, the provisions of the tax treaty.
Can I keep real estate in France after my expatriation?
Yes.
Owning real estate located in France does not, on its own, prevent you from becoming a tax resident of the UAE.
However, the income generated by this property as well as certain real estate capital gains remain subject to tax in France in accordance with the treaty provisions.
Each situation must, however, be assessed in light of all assets and ties maintained with France.
Are dividends paid by a French company still taxable in France?
The tax treatment depends on several parameters, including the provisions of the tax treaty, the status of the beneficiary, and the nature of the distributed income.
It is therefore impossible to provide a general answer without examining the specific situation.
A preliminary study makes it possible to precisely identify the respective taxation rights of France and the United Arab Emirates.
Can French authorities audit an expatriation to Dubai?
Yes.
The transfer of tax residence can be subject to an audit, just like any other situation involving a tax issue.
The administration may ask the taxpayer to justify the reality of their expatriation by means of various elements: effective residence, family organization, professional activity, asset management, or center of economic interests.
The mere production of a visa or a lease agreement is not always sufficient to demonstrate the actual transfer of tax residence.
Is a company created in Dubai enough to stop being taxed in France?
No.
The creation of a UAE company does not automatically result in the transfer of its director's tax residence or the absence of taxation in France.
Tax administrations notably examine the place where strategic decisions are made, where the activity is actually carried out, and where the effective management of the company is located.
An international structuring must therefore always be analyzed as a whole.
Why get support before expatriating?
An expatriation raises questions that go far beyond a simple change of country of residence.
It can have consequences for income tax, wealth tax, succession, company ownership, real estate investments, reporting obligations, or the application of the Exit Tax.
An analysis carried out in advance helps to secure the project, anticipate potential tax risks, and organize the expatriation in compliance with both French and UAE laws.
Cited case law
Conseil d'État, January 26, 2011, No. 308996.
Conseil d'État, January 27, 2010, No. 304995.
Conseil d'État, July 7, 2004, No. 243679.
Conseil d'État, November 9, 2015, No. 370054
