France-Spain tax treaty: residence, pensions, property and wealth

The rules that come up in our files

• Taxes covered (Article 2). On the French side, income tax, corporate tax, payroll tax (taxe sur les salaires) and the solidarity wealth tax (ISF); on the Spanish side, personal income tax (IRPF), corporate tax, wealth tax (Impuesto sobre el Patrimonio) and local taxes on income and wealth. The treaty extends to identical or substantially similar taxes introduced after its signature.
• Residence (Article 4). A resident is a person liable to tax in a State by reason of domicile, residence or a similar criterion, but not a person liable to tax there only on locally sourced income. For dual residents, the tie-breaker looks in turn at the permanent home, the centre of vital interests, the habitual abode and nationality; failing that, the two authorities decide by mutual agreement.
• Dividends (Article 10). The State of the paying company may levy at most 15% of the gross amount. Dividends beneficially owned by a company subject to corporate tax holding at least 10% of the capital, directly for a French resident company, directly or indirectly for a Spanish resident company, are taxable only in that company's State; since the multilateral instrument, the holding must be maintained throughout a 365-day period that includes the day of payment.
• Interest and royalties (Articles 11 and 12). Withholding capped at 10% for interest, with exemptions (government interest, credit between enterprises in the course of an industrial or commercial activity, credit sales of equipment, loans granted by credit institutions). For royalties, a 5% cap, and exclusive taxation in the recipient's State for copyright in a literary or artistic work, excluding films and recorded works.
• Capital gains (Article 13). Real estate gains are taxable in the State where the property is situated. Since the multilateral instrument, the same applies to shares or comparable interests, including in partnerships or trusts, that derived more than 50% of their value, directly or indirectly, from real estate in that State at any time during the 365 days preceding the sale. A substantial shareholding, at least 25% of the capital or profits held alone or with the spouse, ascendants and descendants during the twelve months before the sale, is taxable in the company's State, unless the gain is deferred in the seller's State in a restructuring. Other gains on shares are taxable only in the seller's State of residence.
• Employment income (Article 15). Taxable where the employment is exercised, except for a temporary assignment meeting three conditions: presence not exceeding 183 days in total in any twelve-month period, not the calendar year; an employer not resident in the State of work; remuneration not borne by a permanent establishment or fixed base in that State.
• Cross-border workers (protocol, point 12). The regime of the 1973 treaty is maintained: an employee who proves cross-border worker status is taxable only in the State of residence. A cross-border worker keeps a home in the border zone of one State, returns there in principle every day, and works as an employee in the border zone of the other; the zones are those of the supplementary agreement of 25 January 1961, supplemented in 1964 and 1965, and a certificate has been required since an exchange of letters of 19 February 1998. The French authorities read it strictly: a resident of the French zone whose employer is in the Spanish zone, but who works partly outside that zone, is not a cross-border worker and falls under the general rule (ministerial answer Poulou, National Assembly, 5 April 2005, No. 49092).
• Directors (Article 16 and protocol, point 13). Directors' fees are taxable in the company's State. The remuneration of a Spanish resident who is a partner or manager of a French company other than a société anonyme, subject to corporate tax, is taxable in France.
• Teachers and researchers (Article 20). Invited by a university or an officially recognised institution in the other State, they remain taxable in their home State for up to two years from their arrival.
• Exchange of information and collection (Articles 27 and 28). The two authorities exchange information relevant to the treaty and to their domestic laws, and assist each other in collecting tax claims.
• Anti-abuse rule (multilateral instrument, Article 7). Since 2023, a treaty benefit is denied where it is reasonable to conclude that obtaining it was one of the principal purposes of an arrangement, unless granting it is in accordance with the object and purpose of the relevant provisions.

Five decisions on residence between France and Spain

Franco-Spanish litigation is first of all about residence. Decisions given under the 1963 and 1973 treaties are carried over to Article 4 of the 1995 treaty, whose paragraph 2 was not changed on this point.

• A home in each country: the centre of vital interests decides. A taxpayer who had a home in France and in Spain is resident in France: his dependent disabled daughter lived there and his work gave him most of his income, even though he claimed to stay habitually in Spain (CE, 21 December 1983, no. 27685, given under the 1963 treaty).
• The centre of economic interests. The manager of a Spanish transport company, holding a Spanish certificate of residence, is resident in France: the company had a permanent establishment in France, where he carried on his activity, and his personal and banking ties were there (CAA Bordeaux, 31 March 2015, no. 13BX03353).
• A single lasting home. A taxpayer who claimed to be resident in Spain but had lasting use of a home in Riom had only one permanent home, in France: she is resident in France within the meaning of the treaty (CAA Lyon, 17 November 2011, no. 10LY00783).
• To invoke Spanish residence, you must be taxed there. A couple whose family home moved to Madrid on 1 September 2011 remain resident in France until that date and cannot invoke Article 4 of the treaty, having neither shown nor even alleged that they were taxed in Spain as residents; their Spanish salaries received from 1 September are discharged (CAA Versailles, 31 August 2020, no. 18VE01624).
• Leaving for Barcelona and bank accounts. For 2015, taxpayers who left for Barcelona in 2014 are resident in France under domestic law but resident in Spain under the treaty; the 1,500 euro penalty for an undeclared Spanish account is upheld, treaty residence having no bearing on the reporting obligation in Article 1649 A of the CGI; the year at issue predates the amendment of Article 4 B of the CGI in force since 16 February 2025, which now excludes French tax domicile for a person whom the treaty does not treat as resident in France (CAA Paris, 20 October 2025, no. 24PA00075).

The rule fits in two articles, and it favours the retiree settled in Spain

• Private pensions (Article 18). Pensions paid in respect of past employment are taxable only in the recipient's State of residence. The text does not distinguish by paying body: social security pensions and compulsory supplementary schemes are included, subject only to the government pensions of Article 19. For a retiree living in Spain, the basic state pension and the Agirc-Arrco supplementary pension are therefore taxed in Spain only, and French withholding does not apply once the residence certificate is provided.
• Government pensions (Article 19, paragraph 2). Paid by a State, a local authority or a public law body for services rendered, they are taxable only in that State, unless the recipient resides in the other State and is a national of it without being a national of the paying State. A retired French civil servant living in Spain remains taxed in France on the pension; a retiree who is solely a Spanish national, formerly a French public employee and living in Spain, is taxed in Spain.
• Public commercial activities (Article 19, paragraph 3). Pensions paid in respect of an industrial or commercial activity of a public body follow the private pension rule.
• French resident with a Spanish pension. A pension from Spanish social security or a Spanish private employer is taxable only in France; a Spanish government pension is taxable only in Spain, but it enters French taxable income with a credit equal to the corresponding French tax; if the recipient is a French national without Spanish nationality, it is taxable only in France.
• Formality. Treaty reductions and exemptions require a residence certificate certified by the tax authorities of the State of residence (Article 30).

The Spanish home of a French resident is taxed in both countries

• In Spain. A non-resident owner is subject to Spanish non-resident income tax: on rents, at 19% for an EU resident, who may deduct related expenses; on a home that is not let, on a deemed income equal to 2% of the cadastral value, or 1.1% where that value was revised within the last ten years. On a sale, the buyer withholds 3% of the price as a payment on account and the gain is taxed at 19%.
• In France, rents. They are declared and give rise to a credit equal to the corresponding French tax (Article 24, paragraph 1, a, i): they bear no French income tax but count towards the rate applied to other income. Example: 12,000 euros of net rent, taxed in Spain at 19%, i.e. 2,280 euros; declared in France and neutralised by the credit. We set out the French filings on our page on a second home abroad.
• In France, the Spanish deemed income. It creates no double taxation: the French authorities answered that the corresponding Spanish tax is not deductible in France, where homes reserved for the owner's own use are not taxed (ministerial answer Mesmin, National Assembly, 20 February 1995, No. 20999, given under the previous treaty).
• In France, the gain. It is taxable in France under the real estate gains regime, with a credit equal to the Spanish tax actually paid, capped at the corresponding French tax (Article 24, paragraph 1, a, ii). Example: sale for 440,000 euros, after four years, of a property bought for 400,000 euros, the gain retained in both countries being 40,000 euros. The buyer withholds 13,200 euros; Spanish tax at 19% is 7,600 euros, the excess withholding being recovered through the Spanish return. In France, income tax at 19%, i.e. 7,600 euros with no holding period allowance before the sixth year, is fully absorbed by the credit. Any excess of Spanish tax over French tax is neither carried forward nor refunded. French social levies call for a separate analysis, in light of the scope of the treaty and the taxpayer's social security affiliation.
• Real estate rich companies. A company, even a foreign one, deriving more than 50% of its value from Spanish real estate does not shield the gain from Spain (Article 13 as modified by the multilateral instrument).

What a French resident's return must show

• Two separate calculations. A credit equal to the Spanish tax finally borne, capped at the French tax, for dividends, interest, royalties, gains under Article 13, paragraphs 1 and 2, salaries of ship and aircraft crews, directors' fees and the income of entertainers and sportspersons; a credit equal to the French tax for all other income.
• The corresponding French tax. Where the tax is calculated on a progressive scale, it is obtained by applying to the Spanish-source income the average rate resulting from the tax actually due on total net income (protocol, point 14).
• No refund. The credit is set against tax due in France and cannot be directly refunded (Strasbourg Administrative Court, 9 March 1999, No. 95-555, given under the previous treaty).
• Spanish salaries. Since 1998, a Spanish-source salary received by a French resident has been taxable in both States, with a credit equal to the French tax, and is no longer exempt subject to the effective rate rule as under the 1973 treaty.
• Mutual agreement procedure (Article 26). A taxpayer facing taxation not in accordance with the treaty refers the case to the competent authority of the State of residence within three years of the first notification of the action concerned. Since the multilateral instrument, if the two authorities fail to agree within three years, the unresolved issues go to arbitration at the taxpayer's written request, for cases submitted from 1 July 2022.