France and India announced on 12 December that negotiators have finalised a sweeping overhaul of their 1992 double-taxation treaty—an accord that underpins thousands of cross-border postings and intra-company transfers between the two economies. The renegotiated text, now awaiting cabinet and parliamentary approval, will cut the dividend-withholding rate faced by French parent companies that hold at least a 10 % stake in an Indian subsidiary from 10 % to 5 %. For minority shareholdings below that threshold the rate will rise to 15 %, aligning with most of India’s newer treaties.
Equally significant for globally mobile staff is India’s expanded right to tax capital gains on the sale of shares by French investors, regardless of ownership percentage—a change that could affect equity-based compensation for executives on assignment. The deal also narrows India’s taxing rights on technical-service fees, excluding ‘routine’ advisory work unless specialised know-how is transferred.
![India and France Revamp Tax Treaty, Easing Dividend Withholding for French Investors]()
For companies shuttling talent between the two countries, VisaHQ can simplify the immigration piece: its online platform (https://www.visahq.com/france/) details up-to-date visa and work-permit requirements for France, India and dozens of other jurisdictions, and offers concierge support to ensure that assignment start dates sync smoothly with the treaty’s new tax timelines.
For French multinationals such as Capgemini, Safran and Danone—major employers of expatriates in India—the lower dividend tax sweetens the business case for reinvesting local profits, while the services clause offers clarity for secondees providing back-office support. Mobility advisers nevertheless warn that the end of France’s “most-favoured-nation” status may raise overall tax exposure and complicate cost-projection models for long-term assignments.
Tax directors should map current and future assignees who receive share-based pay, revisit gross-up policies and brief employees on potential capital-gains implications. Once the treaty is signed, India and France plan to exchange instruments of ratification so that the new rates take effect on 1 April 2027—the start of India’s fiscal year—giving companies just over a year to adjust payroll and equity plans.
Equally significant for globally mobile staff is India’s expanded right to tax capital gains on the sale of shares by French investors, regardless of ownership percentage—a change that could affect equity-based compensation for executives on assignment. The deal also narrows India’s taxing rights on technical-service fees, excluding ‘routine’ advisory work unless specialised know-how is transferred.
For companies shuttling talent between the two countries, VisaHQ can simplify the immigration piece: its online platform (https://www.visahq.com/france/) details up-to-date visa and work-permit requirements for France, India and dozens of other jurisdictions, and offers concierge support to ensure that assignment start dates sync smoothly with the treaty’s new tax timelines.
For French multinationals such as Capgemini, Safran and Danone—major employers of expatriates in India—the lower dividend tax sweetens the business case for reinvesting local profits, while the services clause offers clarity for secondees providing back-office support. Mobility advisers nevertheless warn that the end of France’s “most-favoured-nation” status may raise overall tax exposure and complicate cost-projection models for long-term assignments.
Tax directors should map current and future assignees who receive share-based pay, revisit gross-up policies and brief employees on potential capital-gains implications. Once the treaty is signed, India and France plan to exchange instruments of ratification so that the new rates take effect on 1 April 2027—the start of India’s fiscal year—giving companies just over a year to adjust payroll and equity plans.
