Essential guide for residents with incomes in both countries

Portugal and France have a Double Taxation Convention signed on January 14, 1971, in Paris, and approved by Decree-Law No. 105/71, published in the Official Gazette. The Convention entered into force on 18 October 1972 and was subsequently updated by a Protocol of 25 August 2016, approved by Resolution of the Assembly of the Republic No. 58/2017.

The objective is simple: to prevent the same income from being taxed twice, once in France and once in Portugal.

⚖️ What the treaty covers

The Convention applies to income taxes and lays down clear rules for:

• French pensions (public and private)

• Wages and income from work

• Dividends, interest and royalties

• Business income

• Real estate and capital gains

Portugal officially lists this Convention on the Finance Portal among its international tax agreements.

🧩 How the treaty avoids paying tax twice

The Convention uses two mechanisms:

1️⃣ Tax Credit

Portugal allows you to deduct the tax paid in France from the IRS due in Portugal.

2️⃣ Exemption with progressivity

Some income is exempt in Portugal, but influences the rate applicable to the remaining income.

📌 Practical examples

✔ French pensions (including French pensioners in Portugal)

As a general rule: they are taxed in France, and Portugal recognises this tax, avoiding double taxation.

✔ Salaries

If the work is carried out in France, the tax may be due there. Portugal avoids double taxation through tax credit.

✔ Dividends, interest and royalties

The treaty limits the maximum rates of withholding tax applied by France.

✔ Real Estate in France

They are taxed exclusively in France. Portugal applies exemption progressively.

⚠️ Important Note

This information is general and does not replace specialized tax advice, as each situation may have particularities that change the framework.