PROTOCOL 

AMENDING THE CONVENTION BETWEEN THE UNITED STATES OF AMERICA 

AND THE FRENCH REPUBLIC FOR THE AVOIDANCE OF DOUBLE TAXATION AND 

THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON ESTATES, 

INHERITANCES, AND GIFTS, 

SIGNED AT WASHINGTON ON NOVEMBER 24, 1978 

The Government of the United States of America and the Government of the 

French Republic, desiring to amend the Convention Between the United States of America and 

the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal 

Evasion with Respect to Taxes on Estates, Inheritances, and Gifts, signed at Washington on 

November 24, 1978, have agreed as follows: 
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ARTICLE I 

A new paragraph (4) shall be added to Article 1 (Estates and Gifts Covered) of the Convention 

as follows: 

“ (4)(a) Notwithstanding any other provision of the Convention, the provisions of this 

Convention shall not preclude the United States from taxing in accordance with its law 

the estate of a decedent or the gift of a donor who, at his death or at the making of the 

gift, was 

(i) a citizen of the United States, 

(ii) domiciled (within the meaning of Article 4 (Fiscal Domicile)) in the United 

States, or 

(iii) a former citizen or long-term resident whose loss of such status had as one 

of its principal purposes the avoidance of tax (as defined under the laws of the 

United States), but only for a period of ten years following such loss; 

(b) Subparagraph (a) of this paragraph (4) shall not, however, affect the obligation 

undertaken by the United States under: 

(i) Article 10 (Charitable Exemptions and Deductions); paragraph (2) of Article 

11 (Community Property and Marital Deduction); paragraphs (2) or (8) of 

Article 12 (Exemptions and Credits); Article 13 (Time Limitations on Claims 

for Credit or Refund) or Article 14 (Mutual Agreement Procedure); 

(ii) paragraph (3) of Article 11 (Community Property and Marital Deduction) as 

applied to the estates of persons other than former citizens or long-term 

residents referred to in subparagraph (a) of this paragraph (4); or 

(iii) the benefits conferred by the United States under Article 17 (Diplomatic 

and Consular Officials), as applied to transfers by individuals who are neither 

citizens of, nor have immigrant status in, the United States.” 

ARTICLE II 

Paragraph (2) of Article 3 (General Definitions) of the Convention shall be deleted and 

replaced with the following: 
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“(2) As regards the application of the Convention at any time by a Contracting State any 

term not defined therein shall, unless the context otherwise requires, or the competent 

authorities agree to a common meaning pursuant to the provisions of Article 14 (Mutual 

Agreement Procedure), have the meaning which it has at that time under the law of that 

State for the purposes of the taxes to which the Convention applies, any meaning under 

the applicable tax laws of that State prevailing over a meaning given to the term under 

other laws of that State.” 

ARTICLE III 

Article 5 (Immovable (Real) Property) of the Convention shall be deleted and replaced with the 

following: 

"ARTICLE 5 - REAL PROPERTY 

(1) Real property may be taxed by a Contracting State if such property is situated in that 

State. 

(2) The term "real property" shall have the meaning which it has under the law of the 

Contracting State in which the property in question is situated, being understood, 

however, that mortgages or other debt-claims secured by real property shall not be 

regarded as real property. The term shall in any case include property accessory to real 

property, livestock and equipment used in agriculture and forestry, rights to which the 

provisions of general law respecting landed property apply, usufruct of real property 

and rights to variable or fixed payments as consideration for the working of, or the right 

to work, mineral deposits, sources and other natural resources; ships and aircraft shall 

not be regarded as real property. 

(3) The term "real property" shall also include shares, participations and other rights in 

a company or legal person the assets of which consist, directly or through one or more 

other companies or legal entities, at least 50 percent of real property situated in one of 

the Contracting States or of rights pertaining to such property. These shares, 

participations and other rights shall be deemed to be situated in the Contracting State in 

which the real property is situated. 
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(4) The provisions of paragraph (1) shall also apply to real property of an enterprise and 

to real property used for the performance of independent personal services." 

ARTICLE IV 

The last sentence of Article 6 (2) (Business Property of a Permanent Establishment and Assets 

Pertaining to a Fixed Base Used for the Performance of Professional Services) of the 

Convention shall be deleted and replaced with the following: 

“If an individual is a member of a partnership or other similar pass-through entity which 

is engaged in industrial or commercial activity through a fixed place of business, he 

shall be deemed to have been so engaged to the extent of his interest therein.” 

ARTICLE V 

Paragraph (2) (b) of Article 10 (Charitable Exemptions and Deductions) of the Convention 

shall be deleted and replaced with the following: 

“(b) Is organized and operated exclusively for religious, charitable, scientific, literary, 

educational, or cultural purposes; and”. 

ARTICLE VI 

1. Paragraph (2) of Article 11 (Community Property and Marital Deduction) of the Convention 

shall be deleted and replaced with the following: 

“(2) Property (other than community property) which passes to a spouse who is not a 

citizen of the United States from a decedent or donor who was domiciled in France, and 

which may be taxed by the United States solely in accordance with Article 5 (Real 

Property), 6 (Business Property of a Permanent Establishment and Assets Pertaining to 

a Fixed Base Used for the Performance of Professional Services), or 7 (Tangible 

Movable Property), shall, for the purpose of determining United States tax, be included 

in the taxable base only to the extent its value (after taking into account any applicable 

deductions) exceeds 50 per cent of the value of all property included in the taxable base 

which may be taxed by the United States. The provisions of this paragraph shall not 
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apply to a citizen of the United States domiciled in France or a former citizen or longterm resident of the United States referred to in subparagraph (4) (a) (iii) of Article 1 

(Estates and Gifts Covered) of the Convention.” 

2. Paragraph (3) of Article 11 (Community Property and Marital Deduction) of the Convention 

shall be renumbered as paragraph (4). 

3. A new paragraph (3) shall be added to Article 11 (Community Property and Marital 

Deduction) of the Convention as follows: 

“(3) In determining the estate tax imposed by the United States on a decedent's estate 

with respect to property that (within the meaning of the law of the United States) passes 

to the decedent's surviving spouse and that would qualify for the estate tax marital 

deduction under the law of the United States if the surviving spouse were a citizen of 

the United States and all applicable elections were properly made (the “qualifying 

property”), the decedent's estate shall be entitled to a marital deduction provided that: 

(a) At the time of the decedent's death (i) the decedent was domiciled in either 

France or the United States or was a citizen of the United States; (ii) the 

decedent's surviving spouse was domiciled in either the United States or France; 

and (iii) if both the decedent and the decedent’s surviving spouse were 

domiciled in the United States at the time of the decedent’s death, one or both 

was a citizen of France; and 

(b) The executor of the decedent's estate elects the benefits of this paragraph and 

irrevocably waives the benefits of any other estate tax marital deduction that 

would be allowed under the law of the United States on a United States federal 

estate tax return for the decedent's estate by the date on which a qualified 

domestic trust election could be made under the law of the United States. 

The marital deduction allowed under this paragraph (3) shall be equal to the lesser of 

the value of the qualifying property or the applicable exclusion amount (within the 

meaning of the law of the United States of America as of the date of death of the 

decedent) determined without regard to any gift previously made by the decedent.” 
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ARTICLE VII 

Article 12 (Exemptions and Credits) of the Convention shall be deleted and replaced with the 

following: 

“ARTICLE 12 - EXEMPTIONS AND CREDITS 

(1) Except as otherwise provided in this Convention, each Contracting State shall 

impose its tax, and shall allow exemptions, deductions, credits, and other allowances, in 

accordance with its laws. 

(2) Double taxation shall be avoided in the following manner: 

(a) In determining the French tax, where the decedent or the donor was 

domiciled in France at the time of the transfer: 

(i) France shall tax the entire property comprising the estate or the gift, 

including any property which may be taxed by the United States in 

accordance with the provisions of this Convention, and shall allow as a 

deduction from that tax an amount equal to the United States tax paid 

upon the transfer of any property, which, in relation to the same event, 

may be taxed in the United States. 

(ii) The deduction referred to in subparagraph (i) shall not, however, 

exceed that part of the French tax, as computed before any deduction is 

made, which is attributable to the property in respect of which the 

deduction is to be allowed. For purposes of this subparagraph (ii), “that 

part of the French tax” means: 

(A) Where the tax on the property concerned is computed by 

applying a proportional rate, the amount of the taxable net value 

of such property multiplied by the rate which actually applies to 

that property; and 

(B) Where the tax on the property concerned is computed by 

applying a progressive scale, the amount of the taxable net value 

of such property multiplied by the rate resulting from the ratio of

the French tax actually payable on the total property taxable in 
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accordance with French law to the net value of that total 

property. 

(iii) For purposes of subparagraph (i), the United States tax 

(A) shall include any United States tax referred to in Article 2 

(Taxes Covered) but shall not include any tax that is permitted to 

be imposed by the United States under this Convention solely by 

reason of paragraph (4) of Article 1 (Estates and Gifts Covered), 

and 

(B) shall be considered, in the case of property which may be 

taxed by the United States pursuant to Article 5 (Real Property), 

6 (Business Property of a Permanent Establishment and Assets 

Pertaining to a Fixed Base Used for the Performance of 

Professional Services), or 7 (Tangible Movable Property), to be 

equal to that part of the French tax, as defined in subparagraph 

(ii), which is attributable to such property, but only if the 

decedent at his death or the donor at the time of the gift was a 

citizen of the United States and if it is established that the United 

States tax obligations with respect to the death or gift have been 

complied with. 

(b) In determining the United States tax: 

(i) Where both Contracting States impose tax with respect to 

property which is taxable by France in accordance with Article 5 

(Real Property), 6 (Business Property of a Permanent 

Establishment and Assets Pertaining to a Fixed Base Used for the 

Performance of Professional Services), or 7 (Tangible Movable 

Property), the United States shall allow a credit equal to the 

amount of the tax imposed by France with respect to such 

property. 
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(ii) If the decedent or donor was a citizen of the United States at the 

time of death or the making of a gift and would be considered 

under Article 4 (Fiscal Domicile) as having been domiciled in 

France at such time, the United States shall allow a credit equal 

to the amount of the tax imposed by France (after allowing for 

the deduction from tax, if any, allowed under paragraph (2) (a) of 

this Article). 

If the decedent was a former citizen or long-term resident of the 

United States described in subparagraph (4) (a) (iii) of Article 1 

(Estates and Gifts Covered), the United States shall allow a credit 

equal to the amount of the tax imposed by France in respect of all 

property which is included in the United States gross estate solely 

by reason of such status. 

(iii) Notwithstanding the provisions of subparagraphs (i) and (ii), the 

total amount of all credits allowed by the United States pursuant 

to this Article or pursuant to its laws or other conventions with 

respect to all property in respect of which a credit is allowable 

under subparagraphs (i) and (ii) shall not exceed that part of the 

tax of the United States which is attributable to such property. 

(3) In determining the estate tax imposed by the United States, the estate of a decedent 

(other than a citizen of the United States) who was domiciled in France at the time of 

his death shall be allowed a unified credit equal to the greater of: 

(a) The amount that bears the same ratio to the credit allowed under the law of 

the United States to the estate of a citizen of the United States as the value of the 

part of the decedent's gross estate that at the time of the decedent's death is 

situated in the United States bears to the value of the decedent's entire gross 

estate wherever situated; or 

(b) The unified credit allowed under the law of the United States to the estate of 

a nonresident not a citizen of the United States. 
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The amount of any unified credit otherwise allowable under this paragraph shall be 

reduced by the amount of any credit previously allowed with respect to any gift made 

by the decedent. For purposes of subparagraph (a), the part of the decedent’s gross 

estate that is situated in the United States shall not exceed the part of the decedent’s 

gross estate that may be taxed by the United States in accordance with this Convention. 

A credit otherwise allowable under subparagraph (a) shall be allowed only if all 

information necessary for the verification and computation of the credit is provided. 

(4) In determining the gift or inheritance tax imposed by France with respect to 

transfers by reason of death or by gift by an individual, who at the time of the death or 

the making of the gift was a citizen of the United States or was domiciled in the United 

States, there shall be allowed the same deductions and credits as if the individual were 

domiciled in France. In determining the gift or inheritance tax imposed by France with 

respect to transfers by reason of death or by gift by an individual, who at the time of 

death or the making of the gift was domiciled in France, to an individual who is a 

citizen of the United States or is domiciled in the United States, there shall be allowed 

the same deductions and credits as if the recipient were domiciled in France. 

(5) Any credits or deductions for tax imposed by a Contracting State allowable under 

this Article are in lieu of, and not in addition to, any such credits or deductions allowed 

by the laws of the other Contracting State and shall be computed in accordance with the 

provisions and subject to the limitations of the law of the other Contracting State, as it 

may be amended from time to time without changing the general principle thereof. 

(6) If under this Convention any property would be taxable only in one Contracting 

State and tax, though chargeable, is not paid (otherwise than as a result of a specific 

exemption, deduction, exclusion, credit, or allowance) in that State, tax may be imposed 

on that property in the other Contracting State notwithstanding any other provision to 

the contrary. 

(7) Where in accordance with the provisions of the Convention property may not be 

taxed in a Contracting State, that Contracting State may nevertheless, in calculating the 

amount of tax on property that may be taxed in that Contracting State under the 
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provisions of the Convention, take into account the exempted property that is taxable 

under the internal law of that Contracting State. 

(8) The provisions of this Convention shall not result in an increase in the amount of the 

tax imposed by either Contracting State under its domestic laws. A reduction in the 

credit or deduction allowed against a Contracting State’s tax for the tax paid to the other 

Contracting State which results from the application of this Convention shall not be 

construed as an increase in tax.” 

ARTICLE VIII 

The last sentence of paragraph (2) of Article 15 (Filing of Returns and Exchange of 

Information) shall be deleted and replaced with the following: 

“Any information furnished shall be treated as secret and shall not be disclosed to any 

persons other than those (including a court or administrative body) involved in the 

assessment, collection, enforcement, or prosecution in respect of the taxes which are the 

subject of this Convention.” 

ARTICLE IX 

1. The Contracting States shall notify each other when their respective constitutional and 

statutory requirements for the entry into force of this Protocol have been satisfied. 

2. This Protocol shall enter into force on the date of receipt of the later of such notifications and 

shall have effect with respect to gifts made and deaths occurring after that date. 

3. Notwithstanding paragraph (2) of this Article, paragraph (3) of Article 11 (Community 

Property and Marital Deduction) of the Convention and paragraph (3) of Article 12 

(Exemptions and Credits) of the Convention, in each case as amended by this Protocol shall, 

notwithstanding any limitation imposed under the law of a Contracting State on the assessment 

or refund with respect to a person's or estate's return, have effect with respect to gifts made or 

deaths occurring after November 10, 1988, provided that (i) any claim for refund by reason of 

this Article IX is filed before the date that is one year after the first day of the second month 

following the date on which this Protocol enters into force or within the otherwise applicable 

period for filing such claims under domestic law, and (ii) the provisions of paragraph (4) of 
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Article 1 (Estates and Gifts Covered) shall apply with respect to such claim for refund. In the 

case of an estate that, prior to the date on which this Protocol enters into force, was allowed a 

marital deduction by reason of a transfer to a qualified domestic trust, such estate may, within 

the time limit for filing a claim for refund referred to in the preceding sentence, elect to treat 

the qualified domestic trust as if it had not been established in order to claim the benefits of 

paragraph (3) of Article 11 (Community Property and Marital Deduction) or paragraph (3) of 

Article 12 (Exemptions and Credits) of the Convention. If such an election is made, the 

property shall be treated as having been transferred to the surviving spouse at the time of the 

decedent’s death for all purposes of this Convention. 

IN WITNESS WHEREOF, the representatives of the governments, being duly 

authorized thereto, have signed this Protocol. 

Done at Washington, this eighth day of December, 2004, in duplicate, in the English 

and French languages, each text being equally authentic. 

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF 

THE UNITED STATES OF AMERICA THE FRENCH REPUBLIC