U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

39–112 

" ! SENATE 109TH CONGRESS

1st Session 

TREATY DOC. 

2005

109–4 

PROTOCOL AMENDING THE TAX CONVENTION WITH 

FRANCE 

MESSAGE 

FROM

THE PRESIDENT OF THE UNITED STATES 

TRANSMITTING

PROTOCOL AMENDING THE CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE FRENCH REPUBLIC FOR THE AVOIDANCE OF 

DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION 

WITH RESPECT TO TAXES ON INCOME AND CAPITAL, SIGNED 

AT PARIS ON AUGUST 31, 1994 

SEPTEMBER 28, 2005.—The Protocol was read the first time, and together 

with the accompanying papers, referred to the Committee on Foreign 

Relations and order to be printed for the use of the Senate 


E:\Seals\Congress.#13
(III)

LETTER OF TRANSMITTAL 

THE WHITE HOUSE, September 28, 2005. 

To the Senate of the United States: 

With a view to receiving the advice and consent of the Senate to 

ratification, I transmit herewith a Protocol Amending the Convention Between the Government of the United States of America and 

the Government of the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to 

Taxes on Income and Capital, signed at Paris on August 31, 1994 

(the ‘‘Convention’’), signed at Washington on December 8, 2004 (the 

‘‘Protocol’’). Also transmitted for the information of the Senate is 

the report of the Department of State with respect to the Protocol. 

The Protocol was negotiated to address certain technical issues 

that have arisen since the Convention entered into force. The Protocol was concluded in recognition of the importance of U.S. economic relations with France. 

The Protocol clarifies the treatment of investments made in 

France by U.S. investors through partnerships located in the 

United States, France, or third countries. It also modifies the provisions of the treaty dealing with pensions and pension contributions 

in order to achieve parity given the two countries’ fundamentally 

different pension systems. The Protocol makes other changes to the 

Convention to reflect more closely current U.S. tax treaty policy. 

I recommend that the Senate give early and favorable consideration to this Protocol and that the Senate give its advice and consent to ratification. 

GEORGE W. BUSH. 

(V)

LETTER OF SUBMITTAL 

DEPARTMENT OF STATE, Washington, September 2, 2005. 

The PRESIDENT, The White House. 

THE PRESIDENT: I have the honor to submit to you, with a view 

to its transmission to the Senate for advice and consent to ratification, a Protocol Amending the Convention Between the Government of the United States of America and the Government of the 

French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and 

Capital, signed at Paris on August 31, 1994 (the ‘‘Convention’’), and 

signed at Washington December 8, 2004 (the ‘‘Protocol’’). 

The Protocol was negotiated to address certain technical issues 

that have arisen since the Convention entered into force. The Protocol was concluded in recognition of the importance of the United 

States’ economic relations with France. 

The Protocol clarifies the treatment of investments made in 

France by U.S. investors through partnerships located in the 

United States, France, or third countries. Since France taxes 

French partnerships on their worldwide income and does not treat 

them as fiscally transparent, the Protocol confirms that France 

maintains taxing rights with respect to French partnerships. However, the Protocol provides that French treaty benefits will apply 

to U.S. residents who invest through U.S. partnerships or partnerships located in certain third countries. These partnership provisions will eliminate uncertainty and provide significant benefits to 

U.S. investors. 

The Protocol modifies the provisions of the treaty dealing with 

pensions and pension contributions in order to achieve parity given 

the two countries’ fundamentally different pension systems. Under 

the Protocol, the country of source is assigned taxing rights with 

respect to both state social security payments and private pension 

payments. The Protocol also includes a provision that allows U.S. 

persons to deduct voluntary contributions to the French social security system to the same extent that contributions to a U.S. plan 

would be deductible, which is comparable to the provision in the 

Convention that allows French residents deductions for contributions to U.S. private pension plans. 

The Protocol makes other changes to the Convention to reflect 

more closely current U.S. tax treaty policy. The Protocol updates 

the treatment of dividends paid by U.S. real estate investment 

trusts to reflect a change in approach adopted in 1997, which is intended to prevent the use of structures designed to avoid U.S. withholding taxes on outbound dividends while providing appropriate 

VI

benefits to portfolio investors in such trusts. The Protocol also extends the provision in the Convention preserving U.S. taxing rights 

with respect to certain former citizens to cover certain former longterm residents. 

The United States and France will notify each other when their 

respective constitutional and legislative requirements for entry into 

force of the Protocol have been satisfied. The Protocol will enter 

into force on the date of receipt of the later of such notifications. 

In general, it will have effect with respect to taxes withheld at 

source, for amounts paid or credited on or after the first day of the 

second month following the date on which the Protocol enters into 

force, and with respect to other taxes, for taxable periods beginning 

on or after the first day of January following entry into force. However, the rules benefiting U.S. residents investing through partnerships will be applicable as of the effective dates of the Convention. 

The Department of the Treasury and the Department of state cooperated in the negotiation of the proposed Protocol. It has the full 

approval of both Departments. 

Respectfully submitted, 

CONDOLEEZZA RICE. 

(1) 


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