An income tax treaty, and Protocol, between China and France was signed in late November 2013. The treaty and related Protocol-once ratified and in force-would replace the existing treaty and Protocol originally signed in 1984. If the ratification procedures are completed in 2014, it is anticipated that provisions of the new China-France income tax treaty could be effective as early as 1 January 2015. The new income tax treaty between China and France provides for:
- Clarification of the treaty’s application to partnerships;
- Enhanced permanent establishment (PE) provisions;
- Reduced rates of withholding tax on dividends;
- New anti-abuse provisions to facilitate the application of domestic anti-avoidance measures; and
- Special withholding tax treatment of sovereign wealth funds.
