TLDR: France's bilateral tax treaties do not limit the tax privileges of diplomatic and consular agents, which are guaranteed by international law or specific agreements. The right to tax their official income is generally reserved to the sending State, while the French Tax Code (CGI) provides exemptions subject to reciprocity. Exemptions from the taxe d'habitation are strictly regulated.
Primacy of diplomatic privileges over tax treaties
The tax treaties concluded by France with countries such as Algeria, Portugal, Switzerland, Tunisia, or Germany explicitly state that their provisions do not affect the tax privileges of diplomatic or consular agents. These privileges arise either from general rules of international law or from specific agreements. This clause aims to preserve the advantageous tax status of members of diplomatic missions and consular posts.
Right to tax reserved to the sending State
When diplomatic or consular agents benefit from an exemption from income tax or wealth tax in the State where they are accredited (France, in this case), the right to tax is reserved to the sending State (the one that sent them). This rule applies only if the exemption is effective in the host State.
Exemptions provided by the French Tax Code (CGI)
The CGI exempts ambassadors, consuls, and foreign diplomatic or consular agents from income tax, subject to reciprocity. This condition means that the countries they represent must grant similar advantages to French diplomatic and consular agents. The exemption covers their official remuneration.
Treatment of private income
Foreign diplomatic and consular agents in France are exempt from income tax on their official remuneration. Their private income from foreign sources is also exempt in France. However, private income from French sources remains taxable, unless a bilateral tax treaty provides otherwise.
Exemption from taxe d'habitation under conditions
Ambassadors and other foreign diplomatic agents are exempt from the taxe d'habitation on secondary residences only in the commune of their official residence and for that residence only, provided that the countries they represent grant similar advantages to French diplomatic agents. For consuls and consular agents, the exemption is governed by the conventions stipulated with the represented country.
Loss of tax privileges
The loss of diplomatic agent status automatically results in the loss of the associated tax privileges. This rule applies as soon as the agent no longer benefits from their status.
International courtesy for the year of installation
If taxation is issued for the year of installation in France, it is traditionally accepted, for reasons of international courtesy, not to invoke the exemption. This practice remains exceptional and limited to that period.