The Convention between the Kingdom of Spain and the French Republic for the Avoidance of [Double Taxation](/en/glossary/double-taxation), signed in Madrid on 10 October 1995 and in force from 1 November 1997, is the key reference document for any French national relocating to Spain — or any Spanish national relocating to France. It determines, article by article, which of the two states may tax each type of income: salaries, pensions, dividends, real estate capital gains, business profits, and many others. To assist you, the [BMC international tax team](/en/tax/international-tax/) provides this structured analysis of its most important provisions.
This practical guide is aimed at French nationals who have transferred — or are considering transferring — their tax residence to Spain, as well as those who retain real estate or financial assets in France while living in Spain. It covers the key articles of the treaty, the most common mistakes, and the administrative obligations you will need to fulfil.
Overview — Which Treaty Applies
The applicable instrument is the Convention between the Kingdom of Spain and the French Republic for the Avoidance of Double Taxation and the Prevention of Tax Evasion and Fraud in respect of Taxes on Income and on Capital, signed in Madrid on 10 October 1995. It was published in the Spanish Boletín Oficial del Estado on 12 June 1997 (BOE No. 141) and in the Journal Officiel de la République Française on 7 October 1997. It entered into force on 1 November 1997 and replaced the 1963 France-Spain treaty.
The treaty follows the standard OECD Model structure: it begins by defining the persons and taxes to which it applies (Articles 1 to 3), establishes rules on tax residence and permanent establishment (Articles 4 and 5), and addresses each category of income in turn (Articles 6 to 21), before covering the methods for eliminating double taxation (Article 23) and anti-avoidance provisions (Articles 24 to 30).
In 2022, both states incorporated the OECD BEPS (Base Erosion and Profit Shifting) standards through the Multilateral Convention (Multilateral Instrument, “MLI”), which modified certain provisions to combat treaty abuse — in particular, introducing a “Principal Purpose Test” to deny treaty benefits in cases of artificial arrangements.
Taxes covered in Spain: IRPF (Personal Income Tax), Corporate Income Tax (IS), IRNR (Non-Residents Income Tax), Wealth Tax (IP) and equivalent local taxes.
Taxes covered in France: income tax (IR), corporate income tax (IS) and the real estate wealth tax (IFI, which replaced the ISF from 2018).
Establishing Tax Residence — Art. 4, Tie-Breaker Rules
Tax residence is the foundation of all treaty analysis: it determines which state taxes worldwide income and which taxes only locally sourced income.
Spanish domestic law (Art. 9 LIRPF): a person is a Spanish tax resident if they spend more than 183 days in Spain during the calendar year or if the principal nucleus or base of their economic activities or interests is located in Spain. There is also a presumption of residence where the legally non-separated spouse or minor children habitually reside in Spain.
French domestic law (Art. 4B CGI): a person is a French tax resident if they have their home or principal place of residence in France, exercise their principal professional activity in France, or have the centre of their economic interests in France.
Residence conflict (Art. 4 §2 of the treaty): when both domestic laws simultaneously claim residence — which is common in relocation years — the treaty resolves the conflict through an ordered cascade of criteria:
- Permanent home: the state in which the taxpayer has a permanent home available (owned or rented on a long-term basis). If available in both states, move to the next criterion.
- Centre of vital interests: the state with which the taxpayer’s personal and economic ties are closest (family, principal employer, assets, social activities). This is usually the decisive criterion in dual-domicile situations.
- Habitual abode: the state in which the taxpayer is present more frequently, if the two preceding criteria are not determinative.
- Nationality: if the taxpayer is solely of French nationality, France prevails by default.
- Mutual agreement between the two tax administrations, as a last resort.
This cascade applies only to resolve a dual-residence conflict. It does not permit the taxpayer to choose their tax residence freely: the facts must correspond to the criterion invoked.
2026 practice: the AEAT is increasingly vigilant regarding undeclared tax residence situations. A French national who spends more than 183 days in Spain without having registered (empadronamiento, census registration) risks an ex-officio assessment with interest and penalties. The change of tax residence must be formalised: exit declaration in France (Form 2042 indicating the date of departure), registration in the Spanish tax census, and, if not yet subject to IRPF, filing of a first return for the year of relocation.
Salaries — Art. 14, Who Taxes Employment Income
Article 14 of the treaty (headed “Income from employment”) establishes the general rule: salaries, wages and other similar remuneration that a resident of a contracting state derives from employment may only be taxed in that state.
In practice, if you are a Spanish tax resident and work for a Spanish employer (or a foreign employer whose permanent establishment is in Spain), your employment income is taxed exclusively under the Spanish IRPF. France then applies the exemption with progression (Article 23 §1 of the treaty): this income is taken into account to calculate the French marginal rate applicable to any other French-source income, but it is not taxed in France.
Exception in favour of the state of performance: if you reside in France but physically work in Spain (long-term assignment, expatriation without change of residence), Article 14 §2 allows Spain to tax the remuneration attributable to days worked on its territory. This rule applies if: (a) you spend more than 183 days in Spain during a twelve-month period, or (b) your remuneration is borne by a permanent establishment of your employer in Spain.
Directors’ remuneration (Art. 15): directors’ fees and similar remuneration paid by a company to its board members and senior executives are taxable in the state where the company is resident, regardless of the director’s state of residence. A Spanish tax resident who is a director of a French company is taxed in France on that remuneration.
Remote Work — Art. 15 and the 183-Day Rule, Post-COVID Complications
The COVID-19 pandemic fundamentally changed working patterns and created unprecedented tax situations that the 1995 treaty had not anticipated.
The 183-day rule in the teleworking context: a French national who is a French tax resident and works remotely from Spain (second home, extended stay) is not automatically a Spanish tax resident if their stay does not exceed 183 days. However, if the Spanish stay exceeds that threshold, the AEAT may claim Spanish tax residence.
Practical issue: Article 14 §2 provides that the state in which the activity is performed (Spain, if physically working from Spain) may tax the income attributable to days worked there. This means that, even without Spanish tax residence, a French national working from Spain for several months may incur a Spanish filing obligation in respect of the fraction of salary attributable to Spanish working days.
OECD post-COVID position: the OECD’s 2020 recommendations invited states to treat days of forced teleworking during lockdowns as days “outside the territory” to avoid transient double taxation. France and Spain broadly followed this approach for 2020–2021, but the situation has returned to normal for 2022 and subsequent years.
Digital nomads: if you are legally resident in Spain under the Digital Nomad Visa (Law 28/2022) and your employer is foreign, the treaty applies normally. You acquire Spanish tax resident status from the moment the statutory period is met and may opt for the special tax regime of Article 93 LIRPF (Beckham regime), subject to certain conditions — see our guide on the Beckham regime.
Pensions — Art. 18, Mixed Regime, Private vs. Public Pensions
Article 18 of the treaty distinguishes two categories of pension with radically different taxation rules.
§1 — Private pensions (general regime): pensions and annuities from a contracting state paid to a resident of the other state are taxable in the state of residence of the beneficiary. A French national retired from the private sector (CNAV pension, Agirc-Arrco, Madelin contract, PERP, life annuity insurance) who resides in Spain is taxed exclusively in Spain (IRPF) and not in France. France cannot withhold tax on these pensions once Spanish residence is evidenced by a tax residency certificate.
§2 — Public-sector pensions: remuneration, including pensions, paid by a state or one of its political subdivisions or public law entities to a natural person in respect of services rendered to that state is taxable in that state. A retired French civil servant or military officer living in Spain continues to be taxed in France on their retirement pension — even though they no longer reside there. This rule applies to pensions paid by the French State, local authorities and public administrative bodies (teachers, military personnel, magistrates, local government and hospital staff).
Mixed cases: a private-sector worker who also served part of their career in the public sector will receive two pensions: one taxable in Spain (CNAV + Agirc-Arrco) and one taxable in France (CNRACL or SRE pension). They must file returns in both countries for the respective portions.
Nationality exception (Art. 18 §2 in fine): if the recipient of a public pension is simultaneously a Spanish resident and solely of Spanish nationality, the rule is reversed and the pension is taxed in Spain. This exception protects dual nationals or naturalised Spanish citizens who worked for a foreign state.
Practical obligations: if your French pension is taxable in Spain, you must provide your pension fund (CNAV, Agirc-Arrco) or insurer with a tax residency certificate issued by the AEAT (standard form) to avoid French withholding. Processing time can reach several months — initiate this before the first payment.
Dividends and Interest — Art. 10 and 11, 15% Withholding, Double Taxation Relief
Dividends (Art. 10): dividends paid by a company resident in a contracting state to a resident of the other state may be taxed in both states, but the source state withholding is capped:
- 15% if the beneficial owner is an individual or a company holding less than 10% of the capital of the distributing company.
- 10% if the beneficial owner is a company (within the meaning of the treaty) that directly holds at least 10% of the capital.
A Spanish tax resident receiving dividends from a French company therefore benefits from a limited French withholding of 15% (instead of the ordinary 30% flat withholding applicable to common-law non-residents). To obtain this rate, the recipient must provide the French paying institution (bank, company) with a tax residency certificate issued by the AEAT or complete the OECD Form 5000/5001 available from the Direction Générale des Finances Publiques. These dividends are subsequently declared in Spain in the savings tax base of the IRPF (progressive rates of 19%–28% in 2026), and the 15% French withholding is credited as an international double taxation deduction on dividends — Art. 80 LIRPF, subject to the cap of the Spanish IRPF attributable to that income.
Interest (Art. 11): interest from French sources paid to a Spanish resident is taxable in both states, but the French withholding is capped at 10% under the treaty. This interest is included in the IRPF savings tax base and the double taxation deduction applies on the same terms as for dividends.
Note: the proceeds of French life insurance policies (partial or full surrenders) are not always interest within the meaning of the treaty. Their treaty treatment depends on the precise nature of the product and may fall under Article 21 (“other income”), taxable exclusively in Spain for a Spanish resident.
Real Estate — Art. 6 and 13, Capital Gains, Rental Income, Exemptions
Rental income (Art. 6): income from real estate located in a contracting state is taxable in that state. A Spanish tax resident receiving rent from a property in France must declare it in France (Form 2044) AND in Spain (IRPF). Double taxation is eliminated under the credit method in France (Art. 23 §2 of the treaty): France taxes the rental income but grants a tax credit equal to the French tax, capped at the Spanish tax attributable to that income — which in practice amounts to a French exemption since the Spanish rate is typically lower.
Imputed income: if you are a Spanish tax resident and own a property in France that is neither rented nor your primary residence, Spain taxes a notional income of 1.1% (or 2% if the cadastral value has not been revised since 1 January 1994) of the cadastral value, included in the general tax base of the IRPF. France cannot tax this imputed income, as it does not exist under French law.
Real estate capital gains (Art. 13 §1): capital gains from the disposal of real estate located in a contracting state are taxable in that state. France has the exclusive right to tax gains on the sale of property in France, even if the seller is a Spanish tax resident. Spain must exempt those gains (exemption method, Art. 23 §1). Conversely, gains on Spanish real estate are taxed exclusively in Spain.
Primary residence exemption: the French exemption for gains on the primary residence no longer applies automatically if you have transferred your residence to Spain. For non-residents selling their former primary residence in France, a special partial exemption regime has been established (subject to conditions on timing and occupation history), but its application is complex — consult a specialist before any sale.
Self-Employed and Liberal Professionals — Art. 7, When Spain Taxes
Article 7 of the treaty (“Business profits”) applies to income of self-employed persons operating in company form. The general rule is that the profits of an enterprise resident in a contracting state are taxed only in that state — unless the enterprise carries on business in the other state through a permanent establishment situated there.
For a French self-employed person (micro-entrepreneur) or independent professional who moves to Spain and acquires Spanish tax resident status, their business income is subject to Spanish IRPF (income from economic activities) and contributions to the RETA (self-employed Social Security regime). They are no longer subject to French VAT (Spanish VAT applies) or French income tax on that income, provided Spanish tax residence is duly evidenced.
The concept of permanent establishment is key for service providers who retain an office or physical presence in France while resident in Spain: if a fixed professional office with staff is maintained in France, the profits attributable to that French permanent establishment remain taxable in France.
Liberal professions: income from liberal professions (lawyers, doctors, architects, consultants) is governed by Article 14 “Independent personal services” of the treaty, which follows an analogous logic: taxable in the state of residence, unless the person has a fixed base in the other state (office, consulting room), in which case income attributable to that fixed base is taxable in the other state.
Elimination of Double Taxation — Methods, Credit vs. Exemption
Article 23 of the treaty provides two methods for eliminating double taxation, depending on the state and the category of income.
In France (Art. 23 §2):
- Exemption with progression: for income allocated exclusively to Spain under the treaty (Spanish employment income, Spanish real estate gains, etc.), France exempts that income from IR but takes it into account in determining the rate applicable to other French-source income. This income is reported in box 8TI of the French return.
- Tax credit method: for income that France also has the right to tax (dividends, interest, French rental income of Spanish residents), France grants a tax credit equal to the Spanish tax, capped at the French IR attributable to that income.
In Spain (Art. 23 §1):
- Spain primarily uses the tax credit method (international double taxation deduction, Art. 80 LIRPF): it includes all income in the IRPF tax base and then deducts the foreign (French) tax actually paid, capped at the Spanish IRPF attributable to that income.
- For income allocated exclusively to France (French civil servant pensions, gains from French real estate), Spain applies the exemption with progression: it exempts that income but may take it into account to calculate the progressive rate applicable to other Spanish income.
Common mistake: confusing the two methods and applying a credit where the treaty requires an exemption, or vice versa. Incorrect application of the method can lead to understatement of tax (risk of assessment) or unnecessary effective double taxation.
Common Mistakes — Filing in Two Countries, Modelo 720 and Other Pitfalls
Relocating to Spain generates a series of cross-border tax obligations that many French expatriates underestimate or overlook. The following are the mistakes most frequently encountered by our non-resident tax advisory teams.
1. Failing to formalise the exit from France. The change of tax residence is not declared automatically. In France, the exit return for the year of departure must be filed (Form 2042 indicating the departure and its date), declaring income received up to the departure date in France and also French-source income received after departure. Failure to do so leads the French tax administration to continue treating the individual as a resident, resulting in assessment notices and surcharges.
2. Overlooking Modelo 720. Any Spanish tax resident whose foreign assets (bank accounts, securities, real estate) exceed €50,000 per category must file Modelo 720 by 31 March of the following year. A French national retaining a €100,000 life insurance policy in France, a PEA or a property in France must file this form. Since the reform introduced by Law 5/2022 (following the CJEU judgment C-788/19), penalties have been moderated, but the obligation remains in force and failure to comply is sanctionable.
3. Ignoring IRNR for imputed rental income on Spanish properties. If you are a Spanish non-resident and own a property in Spain that is neither your primary residence nor rented, the AEAT expects annual filing of a Modelo 210 declaring imputed income (1.1% or 2% of the cadastral value). This is frequently overlooked by French owners of holiday homes in Spain.
4. Applying the wrong withholding on dividends. Without providing your French bank with a certificate of Spanish tax residence, your French bank will withhold 30% (PFU) on your dividends instead of the 15% provided by the treaty. Rectification is possible but complex (Form 5000 or refund request from the Service des Impôts des Non-Résidents, SINIC, Paris).
5. Believing that dual filing is always required. The treaty exists precisely to prevent double taxation: once treaty tax residence is assigned to Spain under the criteria of Article 4, you are not required to declare your worldwide income in France. Continuing to file a full French return when you are a Spanish resident is not only unnecessary but can generate inconsistencies that the AEAT will view unfavourably.
6. Mismanaging transition years. The year of relocation is always the most complex: you may be a French tax resident until 30 June and a Spanish tax resident from 1 July. Each state taxes only the income attributable to the period of residence in its territory. The return must be split and filing obligations in both countries fulfilled for the corresponding period.
If you find yourself in any of these situations, our international tax team can assist you in regularising your position and avoiding unnecessary penalties.
