France-Senegal tax treaty: how to avoid double taxation in 2026

The framework: France-Senegal Convention 1974 amended 1991

Double taxation is risk #1 for any Senegalese diaspora member with French connections (residence, holding company, dual citizenship) directing a Senegalese company. Without a treaty framework, you pay twice: once in Senegal (CIT, withholding) and once in France (income tax, social levies).

Fortunately, the Convention between the French Republic and the Republic of Senegal for the avoidance of double taxation signed in Paris on March 29, 1974 (amended by addendum of January 10, 1991, entered into force June 1, 1992) settles this question. It applies to residents of one or both contracting States.

It is one of the oldest and most robust tax agreements in West Africa. Still in force in 2026. Members of the broader anglophone diaspora (UK, US, Canada) with French ties — through holdings, dual citizenship, or temporary residence — also need to master it.

H2: Article 3 — Tax residence (cornerstone)

The principle: a person is resident of the country where they are taxable by reason of their domicile, residence, place of effective management, or other similar criterion.

Tie-breaker rules if you are resident of both countries:

• Permanent home — where is your main dwelling?
• Center of vital interests — where are your closest personal and economic ties?
• Habitual abode — where do you spend the most days per year?
• Nationality — which prevails?
• Mutual agreement between administrations.

Practical case 1: you live 9 months in Paris and 3 months in Dakar (where you direct a SAS) = French resident. Your worldwide income (including Senegalese SAS dividends) is declared in France.

Practical case 2: you live 7 months in Dakar with family and 5 months in Paris for consulting = Senegalese resident. Your worldwide income is declared in Senegal, your French-source income is also taxable in France (with treaty mechanism).

H2: Article 8 — Business profits

Principle: business profits are taxable only in the State where the company is established, unless it has a permanent establishment in the other State.

Diaspora application: your Senegalese SAS pays Senegalese CIT (30%, or 25% SME) on its profits. France does not tax these profits as long as they remain in the company. No automatic "fiscal transparency."

Caution: France introduced in 2010 (article 209 B French Tax Code) an anti-avoidance rule that re-taxes foreign subsidiary profits if local taxation is notably lower than French. Senegal is NOT targeted because Senegalese CIT 30% > threshold of 50% of French rate (15-20%).

H2: Article 10 — Dividends

Principle: dividends paid by a company of one State to a resident of the other State may be taxed in both States, BUT with a maximum withholding rate in the source State.

Withholding rates per treaty:

• 15% if beneficial owner holds <25% of capital
• 10% if beneficial owner is a company holding ≥25% of capital

Practical case: you (French resident) receive 100,000 € of dividends from your Senegalese SAS (you hold 100% of capital). Senegal withholding: 10% = 10,000 €. Net received in France: 90,000 €.

In France, declaration in box 2DC of 2042 or 2074. Taxation at PFU 30% (12.8% IR + 17.2% social levies) = 30,000 € in theory. Senegalese tax credit 10,000 € creditable → French net IR due: 20,000 €.

Total tax on 100,000 € dividends: 10,000 (Senegal) + 20,000 (France) = 30,000 €. No double taxation.

H2: Article 12 — Royalties

Principle: royalties (patent licenses, trademarks, software, copyrights, know-how) may be taxed at source with maximum 15% withholding.

Application: if your French holding invoices royalties to your Senegalese SAS (e.g. trademark license), Senegal applies 15% withholding at payment time. Tax credit in France.

Re-qualification caution: the Senegalese tax authority (DGID) often re-qualifies excessive royalties to a foreign holding as disguised dividend distribution (transfer pricing issue). Mandatory OECD documentation if the group exceeds certain thresholds.

H2: Article 13 — Capital gains

Principle for share transfers:

• Capital gains on real estate sale: taxable in the State where the property is located.
• Capital gains on shares of a real-estate-dominant company: taxable in the State where properties are.
• Capital gains on other shares: taxable in the State of residence of the transferor.

Practical case: you (French resident) transfer your 100% of the Senegalese SAS (services revenue, no majority real estate) to a Senegalese buyer for 500,000 €. Capital gain 400,000 € (price - acquisition price).

French taxation: PFU 30% = 120,000 €. Possible holding duration discount if progressive scale option and shares acquired before 2018. Senegal does not tax this capital gain (French resident).

H2: Foreign tax credit mechanism

French method (treaty article 22): France applies its tax as if income were French-source, then credits the tax equal to Senegalese tax actually paid (within the limit of corresponding French tax).

Simplified formula:

• Senegalese tax paid = X
• Theoretical French tax on same income = Y
• Creditable tax = min(X, Y)
• French net tax due = Y - credit = max(0, Y - X)

Practical case 50,000 € dividends:

• Senegal withholding 10% = 5,000 €
• France PFU 30% = 15,000 €
• Creditable = min(5,000, 15,000) = 5,000 €
• French net IR = 15,000 - 5,000 = 10,000 €
• Total taxes: 5,000 + 10,000 = 15,000 €
• Effective rate: 30% (= normal PFU). No over-taxation.

H2: Complete case — French director of Senegalese holding

Setup:

• French holding SARL (M. Diop, Paris resident)
• Senegal subsidiary SAS (100% owned by holding)
• SAS annual revenue: 800,000 €, CIT 25% = 200,000 €
• SAS net profit: 600,000 €
• Dividend distribution to French holding: 500,000 €

Step 1 — In Senegal:

• Dividend withholding 10% (≥25% participation) = 50,000 €
• Net upstreamed to France: 450,000 €

Step 2 — In French holding:

• Parent-subsidiary regime (art 145 French Tax Code) if holding holds ≥5% for ≥2 years = 95% exemption, taxation on 5% (expense share)
• Taxation: 500,000 × 5% × 25% (French SME CIT) = 6,250 €
• Senegalese tax credit creditable on this share = limited

Step 3 — If M. Diop withdraws 200,000 € from French holding to personal estate:

• New PFU 30% taxation = 60,000 €
• Cumulative taxes: 200,000 (SN CIT) + 50,000 (withholding) + 6,250 (FR CIT) + 60,000 (personal PFU) = 316,250 € on 800,000 € revenue
• Total effective rate: ~40%

Optimization: keep profits in French holding for reinvestment (real estate, other holdings) without triggering PFU. Withdraw personal dividends progressively as needed.

FAQ

Am I French or Senegalese tax resident?

Main criterion: where do you spend >183 days/year. Secondary criteria: permanent home, center of vital interests. If ambiguous, request a tax residence certificate from the chosen country to clarify. Important: only one of the two statuses at a time (except rare dual residence cases, handled by tie-breaker).

Do French social levies (17.2%) apply to Senegalese dividends?

Yes, for French resident: CSG 9.2% + CRDS 0.5% + Solidarity Levy 7.5% = 17.2% on foreign dividends (included in PFU). No bilateral convention exempts this.

How to justify foreign tax credit in France?

Attach to declaration 2042 the form 2047 (foreign-earned income) + Senegalese bank certificate of gross amount, withholding and net + Senegalese DGID certificate of withholding payment. Keep these documents 6 years (statute of limitations).

Does Senegal tax French retirees moving to Dakar?

Yes. If you are Senegalese resident (>183 days/year), your French pensions are taxable in Senegal per treaty article 18. France withholds at source but grants tax credit. Often more favorable overall taxation in Senegal than France for retirees (Senegalese progressive IRPP up to 40%, but no social levies).

What about holdings via Morocco, Mauritius, Luxembourg?

Sandwich structures (Mauritius notably) are targeted by EU ATAD directive and OECD BEPS. Re-qualification risk. Senegal also signed the OECD MLI (Multilateral Instrument) in 2018, tightening conventions against avoidance. Tax advisor opinion essential before any setup.

Let's talk about your case

If you are a UK/US/Canadian-based Senegalese diaspora member with French connections (holding, dual residence, family in France), we coordinate French + Senegalese tax specialists to optimize the treaty. WhatsApp +221 77 596 93 33.

_Disclaimer: analysis compliant with the France-Senegal Convention of March 29, 1974 amended 1991, 2026 French Tax Code, 2026 Senegalese General Tax Code. For your specific case, consult a tax lawyer or chartered accountant specialized in international matters._