The France-Portugal tax treaty, point by point

The tax treaty between France and Portugal was signed in Paris on January 14, 1971. It covers only income taxes. An amendment signed in Lisbon on August 25, 2016, entered into force on December 1, 2017, and the Multilateral Convention (MLI) also modifies it. Inheritance tax is governed by a separate agreement, signed in Lisbon on June 3, 1994, which has a limited scope. This page presents the most important articles and explains what it does not cover.

A text from 1971, an amendment from 2016, the MLI

The 1971 convention. It was signed in Paris on January 14, 1971, and published in the Official Journal on January 4, 1973. The administrative list of tax treaties (BOI-ANNX-000306, version of April 29, 2026) classifies it in the "IR" column, meaning income tax, and only in that column. This treaty therefore does not cover wealth tax or inheritance tax.

The 2016 amendment. Signed in Lisbon on August 25, 2016, it entered into force on December 1, 2017 (Decree No. 2018-7 of January 4, 2018). It applies for the first time from January 1, 2018, to taxes withheld at source. Its content can be found in the consolidated text published by the tax authorities.

The MLI. Portugal is included in the administrative list of conventions amended by the multilateral convention signed in Paris on June 7, 2017 (BOI-ANNX-000511, version of April 29, 2026). It has been in force for Portugal since June 1, 2020. For France, it took effect on January 1, 2021 for taxes withheld at source, and on December 1, 2020 for other taxes.

The consolidated text with the MLI includes Article 31 bis, which establishes the principal purpose criterion: a treaty benefit is denied if it is reasonable to conclude that it was one of the principal purposes of an arrangement or transaction. The MLI also amends Articles 5, 9, 26, and 32, and Article 14 § 1 (see below).

Beware of the 2012 administrative doctrine

The administrative commentary on the convention (BOI-INT-CVB-PRT) was first published on September 12, 2012. It does not mention any amendments, even though the 2016 amendment exists. It does not include commentary on dividends, interest, or capital gains; it refers to sub-chapters. Do not consider it an up-to-date interpretation of the convention as it currently applies; instead, consult the consolidated text published by the tax authorities.

The essential rules

Dividends

Dividends are taxable in the recipient's country of residence. The country of the distributing company may also tax them, up to a limit of 15% of the gross amount (Article 11, paragraph 2). This limit does not reflect the actual withholding tax applied. The other paragraphs of Article 11 are not detailed here.

Royalties

For royalties, the ceiling is 5 % of the gross amount (article 13).

Capital gains

Article 14 sets out two rules. Capital gains on real estate are taxable in the State where the property is situated (§ 1). Since the MLI, this rule extends to gains from shares or units that, at any time during the 365 days preceding the transfer, derived directly or indirectly more than 50% of their value from real estate situated in that State. Gains on property not covered by the first two paragraphs, including securities not covered by § 1, are taxable only in the State of which the transferor is resident (§ 3).

This page does not address specific cases of significant shareholdings in a company, nor the interaction with French domestic rules on capital gains for non-residents. These details can be found in the relevant text.

Pensions

Private pensions are taxable only in the recipient's country of residence (Article 19). Public pensions are taxable only in the country that pays them, unless the recipient is a resident and national of the other country (Article 20, paragraph 2). Social security pensions are not covered here.

Inheritance: a 1994 agreement of limited scope

The 1971 convention concerns income taxes, not inheritance taxes. Inheritance taxes are governed by an agreement signed in Lisbon on June 3, 1994 (exchange of letters dated June 29 and 30, 1994), which entered into force on December 31, 1994. It was approved by Law No. 94-1007 of November 23, 1994, and published by Decree No. 95-219 of February 23, 1995. Its duration is unlimited, and it may be terminated with a minimum of six months' notice, effective at the end of a calendar year. The administrative list classifies it under inheritance and gifts.

Article 1 of the agreement applies to the other State and its local authorities the exemptions that the legislation of each State grants to itself or its local authorities. Article 2 grants public bodies with scientific, artistic, cultural, educational, or charitable purposes in one State the same exemptions in the other State as those enjoyed by comparable bodies in that State, subject to reciprocity. Article 3 establishes the application date: from January 1, 1992, for Article 1 with regard to death and gifts, and from the date of entry into force for Article 2. The agreement does not contain any rules for the allocation of taxing rights between the two States (real estate, personal property, the deceased's residence).

Who is a resident?

Article 4, paragraph 2 of the convention governs the case of a person resident in both States. It considers, in order: permanent home, center of vital interests, habitual residence, nationality, and finally, the amicable agreement of the competent authorities. When the convention applies, its concept of residence takes precedence over domestic tax domicile. French tax domicile is addressed on our page about leaving France.

What this page does not cover

The entry into force of the 1971 convention, interest, the salary regime and the 183-day threshold, the elimination of double taxation, and the issue of a clause specific to substantial shareholdings are not presented here, nor are the details of the 2016 amendment and the Portuguese reserves in the MLI. These points can be found in the consolidated text.

Numerical example (fictitious profile)

Situation. A resident of Portugal, a fictitious profile, holds shares in a French company which pays him €40,000 in gross dividends per year.

Issue. He wants to know what amount of tax the State can withhold from the distributing company.

Strategy. He starts from the ceiling of Article 11 § 2, then has his resident status examined, the formalities to be completed and the clause of the main purpose.

Result. The 15 % cap on the gross amount represents €6,000 out of €40,000 (€40,000 × 15 %). This amount is a cap: it does not indicate the actual withholding rate applied.

What changes depending on your situation

• Your residence as defined in the agreement.
• The nature of the income: dividend, royalty, capital gain, pension.
• The nature of your assets: real estate or securities.
• The date of the operation, with regard to the 2016 amendment and the MLI.
• The nature and location of your assets, for inheritance purposes.

An article should be read in light of the facts in your case, and no result is guaranteed in advance.