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Resident in Canada? Your French dividends are costing you more than you think.

  • Feb 18
  • 3 min read

Relocating to Canada while maintaining a company in France is a common strategy among international entrepreneurs. Montreal, Toronto, and Vancouver offer a dynamic environment, access to the North American market, and an attractive quality of life.


The problem isn't the move. It's primarily about continuing to pay oneself as if nothing has changed.


Because once tax residence is transferred to Canada , continuing to receive remuneration via French dividends without adapting the strategy can create a significant tax discrepancy.


And this discrepancy is not immediately visible. It only appears when the flows are actually consolidated.


"Mind the Gap" inscription on the London Underground


The illusion of the “French rate”


The first layer: corporate tax in France

In France, the standard corporate tax rate is set at 25% (article 219 of the CGI – impots.gouv.fr ).

Thus, a profit of €100,000 becomes €75,000 distributable.

This initial tax is often included in the calculations. But, that's not where the difficulty lies.


Withholding tax as provided for in the France-Canada agreement

When dividends are paid to a Canadian tax resident, the France-Canada tax treaty (Article 10) provides for a cap on withholding tax:


  • 15% in principle

  • 5% when the beneficiary is a company holding at least 10% of the capital

(Source: France–Canada Tax Convention, treaty-accord.gc.ca)


The convention thus avoids full double taxation. However, it does not eliminate taxation.




Canadian taxation: the real paradigm shift


Canada taxes its residents on their worldwide income ( Canada Revenue Agency — canada.ca ).


Dividends received from a French company are therefore considered foreign dividends . However, unlike dividends paid by taxable Canadian companies, they do not qualify for the federal dividend tax credit ( Canada Revenue Agency – Federal Dividend Tax Credit ).


A foreign tax credit may be claimed under section 126 of the Income Tax Act. However, its effectiveness depends on the applicable marginal tax rate and the limits set by Canadian legislation.


In other words : purely "French-centric" reasoning no longer works. Because your actual rate becomes cross-border.



French entrepreneur residing in Canada lying on the floor covered in gold glitter

The strategic issue: effective management


Beyond the financial flow, a more structural question may arise.


Canadian case law and legal doctrine use the “central management and control” criterion to determine the residence of a corporation

(Canada Revenue Agency – Residency of a Corporation).


A company incorporated in France remains, in principle, a French resident.


However, if its effective management is exercised from Canada, a situation of dual residence could theoretically be analyzed, subject to the rules of separation provided for by the tax convention ( article 4 ).


This point does not concern all leaders, admittedly. But it deserves to be included in a serious analysis.




The real strategic question


International taxation is not a matter of isolated rates.


The problem is the lack of alignment between:

- the place of personal residence, - the place of value creation, - the legal structure, - and the method of remuneration.

Depending on the province of residence and the taxpayer's marginal tax bracket, the effective consolidated rate may turn out to be significantly higher than projections made on a purely French basis.


🇨🇦 Canada vs 🇺🇸 United States: same dividend, different logic


In the United States, dividends can, under certain conditions, benefit from the rates applicable to qualified dividends (0%, 15% or 20%), with a possible application of the Net Investment Income Tax of 3.8%.


In Canada, the absence of a dividend tax credit for foreign dividends profoundly alters the equation.


👉 Are you in or planning to move to the United States? Check out our dedicated page:




The Blendy approach


At Blendy , we support executives between France, Montreal and Miami with an integrated cross-border approach.


Before discussing optimization, we first need to discuss consistency:

  • tax consistency,

  • governance consistency

  • economic coherence.


The issue is not about reducing taxes at all costs. The issue is about avoiding structural inconsistencies.



Do you live in Canada and receive dividends from a French company?

The right thing to do is to calculate your actual consolidated effective rate .




Official sources



With Blendy , international CPA based in France, Canada and the USA, take advantage of digital accounting and tailor-made advice to accelerate your financial process and develop your business.


Pennylane, Dext, QuickBooks and Stripe certified, we support digital and IT companies, e-Commerce, SaaS in France and internationally.

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