France-Portugal Double Taxation Convention: rules, application and benefits for retirees

France-Portugal Double Taxation Treaty

The Double Taxation Treaty between France and Portugal was created to prevent citizens from paying taxes twice on the same income — once in the country of origin and once in the country of residence. This tax treaty was initially signed in 1971 and reformulated in 2017, aligning with international standards of the OECD and the European Union.

How the convention works

A French pensioner who lives in Portugal and receives a pension from France will not have to pay tax twice on that income. The tax is usually paid in the country of origin of the pension (France), and Portugal recognizes this payment, avoiding new taxation. In some cases, France grants the beneficiary a tax credit corresponding to the tax paid in Portugal, if applicable.

How to trigger the convention

To benefit from the provisions of the agreement, it is necessary to fill in the Form Model 21-RFI, available on the Finance Portal. This document allows you to request a total or partial exemption from withholding tax from Portuguese tax, ensuring that only the competent country taxes the income.

Taxes covered

• In France: income tax (impôt sur le revenu), corporate tax (impôt sur les sociétés), social contributions (CSG, CRDS) and withholding taxes.

• In Portugal: personal income tax (IRS).

Attention to exceptions

French civil servants may be subject to different rules. Taxation varies depending on the type of income and the taxpayer's tax residence status.

Practical examples of application

1. General Pension System (CNAV)

   • Taxation in France: yes, at origin.

   • Taxation in Portugal: no, as long as the convention is applied.

   • Solution: Fill out the 21-RFI template.

   • Result: tax paid only in France.

2. Private Supplementary Pension (AGIRC-ARRCO)

   • Taxation in France: yes, withholding tax.

   • Taxation in Portugal: possible rate of 10% if the retiree has Non-Habitual Resident (NHR) status.

   • Solution: apply for NHR status and apply the convention.

   • Result: reduced taxation in Portugal, with tax credit in France.

3. French Civil Servant

   • Taxation in France: mandatory.

   • Taxation in Portugal: no, the convention confers the exclusive right of taxation on France.

   • Result: pension taxed only in France.

4. Retired with NHR Status before 2020

   • Taxation in France: yes, depending on the pension.

   • Taxation in Portugal: total exemption for 10 years (old regime).

   • Result: maximum tax benefit, no longer available to new residents.

5. Retired with NHR Status after 2020

   • Taxation in France: yes.

   • Taxation in Portugal: flat rate of 10% on foreign pensions.

   • The result: reduced taxation in Portugal, which is still advantageous compared to the French system.

Conclusion

The Double Taxation Convention between France and Portugal is an essential instrument to protect taxpayers and ensure tax justice. By setting clear rules on residence and taxation, it avoids double taxation, promotes legal certainty and strengthens cooperation between tax administrations. For French retirees in Portugal, completing the Model 21-RFI and, where applicable, obtaining NHR status are fundamental steps to optimize taxation and enjoy the expected benefits.