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V1478-14 4 June 2014 · SG de Fiscalidad Internacional Criterion in force
IRPF · residencia fiscal

Pensions from a public entity with industrial or commercial activity are taxed only in the resident state

A French citizen resident in Spain asks whether pension from a French public company is taxed in Spain or France. The DGT determines that, as the entity has industrial or commercial activity, the pension is taxed exclusively in Spain.

The question raised

The taxpayer asks whether the pension to be received from the public enterprise of an industrial and commercial nature will be subject to Personal Income Tax or whether it will only be subject to taxation in France, once he has tax residence in Spain in the 2014 fiscal year.

The DGT's ruling

Pursuant to Article 19.3 of the Spanish-French Convention, the provisions regarding pensions from former employment apply to remunerations paid by reason of an industrial or commercial activity carried out by a legal person under public law. As the pension originates from a public enterprise of an industrial and commercial nature, the taxing power rests exclusively with the State of residence, in this case Spain.

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