France-Israel tax treaty: which country taxes what in 2026

You made aliyah but kept a flat in Paris, you receive a French pension in Tel Aviv, or your Israeli company is opening a French subsidiary: the same question comes back, which country taxes which income. The France-Israel tax treaty answers it article by article. Here are the rules in force in 2026, seen from the French side, with rates and filing steps.

Quick answer. The France-Israel treaty of 31 July 1995, amended by the multilateral instrument (MLI) since 2019, allocates taxing rights. Rent and sale proceeds from property in France remain taxed in France. Private pensions, including French basic and complementary state pensions, are taxed in Israel. On dividends, French withholding tax is capped at 15% (5% for a company holding 10% of the capital for 365 days).

The treaty between France and Israel was signed on 31 July 1995 and has applied since 1996. Since 1 January 2019 it reads together with the changes made by the OECD multilateral instrument (MLI), which tightened the clause on real-estate-rich companies and added a holding period for the reduced dividend rate. It covers taxes on income. There is no France-Israel treaty on inheritance and gift taxes: the official list of French tax treaties shows only the income treaty for Israel.

It works in two stages: it says which country may tax, then how the country of residence avoids double taxation, usually through a tax credit.

Everything starts with tax residence. If each country treats you as a resident under its own law, article 4 of the treaty decides in this order:

1. the country where you have a permanent home;
2. if you have one in both, the country of your centre of vital interests (closest personal and economic ties);
3. failing that, the country where you habitually stay;
4. then the country of your nationality;
5. if you hold both nationalities, the two tax authorities decide by mutual agreement.

The year of aliyah needs particular care: the date of departure, a home kept in France and family members who stayed all weigh in the analysis. For the French criteria, see our article on tax residence of foreigners in France.

Income from real estate located in France is taxable only in France (article 6). An Israeli resident who lets a flat in Paris therefore declares that rent in France every year.

• Income tax: a non-resident is taxed at a minimum rate of 20% up to 29,579 euros of income (2025 income) and 30% above, unless they ask for the average rate based on their worldwide income and that rate is lower.
• Social levies: 17.2% on unfurnished lettings, 18.6% on furnished lettings. The reduced 7.5% rate is reserved for people covered by a social security scheme of the European Economic Area, Switzerland or the United Kingdom: it does not apply to an Israeli resident.
• Furnished lettings (LMNP): they remain open to non-residents, taxed as industrial and commercial profits and declared on form 2042-C-PRO, under the micro-BIC or the actual-expenses regime. See our LMNP accounting support.

A capital gain on property located in France is taxable in France (article 13). For a non-resident the tax is 19%, plus 17.2% social levies, with allowances for the length of ownership. It is paid when the deed of sale is registered.

A seller resident in Israel must in principle appoint an accredited tax representative, unless an exemption applies, in particular when the sale price does not exceed 150,000 euros per seller.

Shares in a real-estate-rich company follow the same logic: since the MLI, gains are taxable in France if, at any time during the 365 days before the sale, the shares derive more than 50% of their value from real estate located in France.

Dividends. The 31.4% flat tax applies only to French residents. For an Israeli resident, France applies its withholding tax: 12.8% for an individual, 25% for a company, within the treaty cap. An individual therefore bears 12.8%, with no French social levies on those dividends. The MLI adds a principal purpose test: an arrangement mainly aimed at obtaining the reduced rate can be disregarded.

Sale of shares. Apart from real-estate-rich companies, a gain on shares is taxable in the seller's country of residence. For a substantial holding (at least 25% in a family company, 10% in other cases, during the previous 12 months), France may tax it, up to 18%.

Salaries. They are taxable where the work is performed. An Israeli resident sent to France on a short assignment remains taxed only in Israel if three conditions are all met: no more than 183 days of presence in any 12-month period, an employer that is not resident in France, and pay not borne by an establishment in France (article 15).

Private pensions. They are taxable only in the country of residence (article 18). French basic social security pensions and complementary pensions paid to an Israeli resident are therefore taxed in Israel, and France applies no withholding tax to them.

Public pensions. Civil service pensions remain taxable in France, unless the recipient lives in Israel and is an Israeli national without French nationality (article 19).

Non-resident withholding tax. For French-source salaries and pensions that remain taxable in France, the article 182 A withholding applies in 2026 at 0% up to 17,275 euros, 12% up to 50,112 euros and 20% above.

A French company owned from Israel pays French corporate tax on its profits. The reduced 15% rate on the first 42,500 euros of profit requires turnover of no more than 10 million euros and fully paid-up capital held at least 75% by individuals, or by a company meeting the same conditions. A wholly owned subsidiary of an Israeli company qualifies only if the parent itself meets those conditions.

An Israeli company that makes VAT-able supplies in France without an establishment there must appoint a tax representative: Israel is not on the list of exempted countries. See the tax representative in France and our guide to forming a French company as a non-resident.

IFI. A non-resident owes the French real estate wealth tax only on real estate located in France, held directly or through companies, when its net value exceeds 1,300,000 euros.

Inheritance and gifts. With no treaty, each country applies its own law. On the French side, the deed and the duties are handled by a notary; our firm deals with the surrounding French tax aspects, without taking the notary's place.

Non-residents with French-source income taxable in France are handled by the tax office for non-resident individuals (SIPNR). That income must be declared online every year, even when withholding tax has already been applied. Local taxes on a property in France remain with the tax office where the property is located.

The treaty provides that Israel grants a credit for the tax paid in France on income France is entitled to tax (article 23), up to the corresponding Israeli tax. The Israeli return is a matter for your adviser in Israel; our firm works on the French side.

For a French resident with Israeli income, France grants a tax credit equal to the French tax in most cases, and equal to the tax paid in Israel, capped, for dividends, interest, royalties and certain gains. The general method is explained in our article on tax treaties.

We have a Hebrew-language page for Israeli companies and residents, covering these rules and setting up a company in France.

• Rent and sale proceeds from property in France remain taxed in France, with a 20% or 30% minimum rate and 17.2% or 18.6% social levies.
• French basic and complementary pensions of an Israeli resident are taxed in Israel; public pensions in principle remain taxed in France.
• French withholding on dividends is capped at 15%, or 5% for a company holding 10% of the capital for 365 days.
• There is no France-Israel treaty on inheritance and gifts.
• A non-resident's French income is declared every year to the SIPNR.