**Executive Summary**
On February 23, 2026, India and France signed an Amending Protocol to the India-France Double Taxation Avoidance Convention (DTAC) originally signed on September 29, 1992. The Protocol aims to boost investment, strengthen economic cooperation, and align the tax treaty with international standards. The changes introduced shall enter into effect subsequent to the completion of internal procedures under the laws of both the countries and subject to the terms agreed between the two countries.
**Key Points / Main Content**
* **Capital Gains:**
* Grants full taxing rights over capital gains from the sale of company shares to the jurisdiction where the company resides.
* **Most-Favoured-Nation (MFN) Clause:**
* Deletes the MFN clause from the DTAC Protocol.
* **Dividend Taxation:**
* Replaces the single 10% tax rate with a split rate: 5% for holdings of at least 10% capital and 15% for other cases.
* **Fees for Technical Services:**
* Modifies the definition to align with the India-US Double Taxation Avoidance Agreement.
* **Permanent Establishment:**
* Expands the scope by adding Service PE.
* **Exchange of Information:**
* Updates provisions and introduces a new article on Assistance in Collection of Taxes as per international standards.
* **BEPS Multilateral Instrument (MLI):**
* Incorporates applicable provisions of the BEPS Multilateral Instrument (MLI).
**Impact Analysis**
**Stakeholder: Taxpayers**
* **Impact:** The Amending Protocol provides greater tax certainty and is expected to boost the flow of investment, technology, and personnel between India and France.
* **Action Required:** Review tax strategies based on the updated provisions, particularly related to capital gains, dividend taxation, and fees for technical services.
**Stakeholder: Governments of India and France**
* **Impact:** The Amending Protocol updates the DTAC to latest international standards, strengthens mutual tax cooperation, and enhances the economic relationship between the two countries.
* **Action Required:** Complete internal procedures for the Amending Protocol to enter into effect.
Key Entities Referenced
India-France Double Taxation Avoidance Convention (DTAC): A bilateral agreement between India and France aimed at avoiding double taxation and preventing fiscal evasion with respect to taxes on income.
Amending Protocol to India-France DTAC: A protocol signed to amend the existing India-France Double Taxation Avoidance Convention (DTAC), updating it to align with international standards, including BEPS provisions.
Ministry of Finance: The Indian government ministry responsible for the administration of finances, including international tax treaties and agreements.
Central Board of Direct Taxes: Governing body for the Indian tax department
France: One of the two countries involved in the Double Taxation Avoidance Convention, highlighting the agreement's impact on cross-border economic activities.
Ministry of Finance
India and France sign Amending Protocol to
update Double Taxation Avoidance Convention
(DTAC)
Amending Protocol to India-France DTAC to boost
investment and strengthen economic cooperation; Aligns tax
treaty with international standards
Posted On: 23 FEB 2026 5:02PM by PIB Delhi
During the recent visit of the President of France to India, the Government of the Republic of India and
the Government of the French Republic have signed a Protocol amending the India-France Double
Taxation Avoidance Convention, signed on 29 September 1992 (‘India-France DTAC’). The Amending
Protocol was signed by Mr. Ravi Agrawal, Chairperson, Central Board of Direct Taxes, Government of
India, and Mr. Thierry Mathou, Ambassador of France to India, on behalf of their respective Governments.
The Amending Protocol provides full taxing rights in respect of capital gains arising from sale of shares of
a company, to the jurisdiction where such company is a resident. The Amending Protocol also deletes the
so-called Most-Favoured-Nation (MFN) Clause from the Protocol to the DTAC, thereby bringing to rest
all issues relating to it. The Amending Protocol also modifies the taxation of income from dividends by
replacing a single rate of 10% of tax with a split rate of 5% for those holding at least ten percent of capital
and 15% of tax for all other cases. It also modifies the definition of ‘Fees for Technical Services’ by
aligning it with the definition in India US Double Taxation Avoidance Agreement, and expands the scope
of ‘Permanent Establishment’ by adding Service PE.
The Amending Protocol also updates the provisions on Exchange of Information and introduces a new
Article on Assistance in Collection of Taxes, as per international standards. This would enable and
facilitate seamless exchange of information and strengthen mutual tax cooperation between India and
France. The Amending Protocol also incorporates within the DTAC, the applicable provisions of BEPS
Multilateral Instrument (MLI), that had already become applicable consequent to the signing and
ratification of MLI by India and France.
The changes introduced through the Amending Protocol shall enter into effect subsequent to the
completion of internal procedures under the laws of both the countries and subject to the terms agreed
between the two countries.
The Amending Protocol updates the India-France DTAC to the latest international standards, in a manner
that balances the interests of both India and France, and updates it in accordance with international
standards. The Amending Protocol will provide greater tax certainty to the taxpayers and boost flow of
investment, technology and personnel between India and France, and thereby strengthen the economic
relationship between the two countries.
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