The France-Germany tax treaty, article by article: 1959 for income, 2006 for inheritances

Two tax treaties govern your tax relations with Germany. The treaty of July 21, 1959, deals with income and wealth. The treaty of October 12, 2006, deals with inheritances and gifts. The first treaty includes a regime for cross-border workers, with a 45-day grace period resulting from a mutual agreement of February 16, 2006. This page only includes articles confirmed by the source.

Two conventions, a 2015 amendment and the multilateral convention

1959. Signed in Paris, entered into force on November 4, 1961. The BOFiP lists the amendments of June 9, 1969, September 28, 1989 and December 20, 2001, and an amicable agreement of February 16, 2006. The consolidated text adds the Berlin amendment of March 31, 2015 and the multilateral convention (MLI) of June 7, 2017. A "right to benefits" clause denies the conventional benefit if obtaining it was one of the main objectives of an arrangement.

2006. Signed in Paris on October 12, 2006, entered into force on April 3, 2009. The administration's list (BOI-ANNX-000306, dated April 29, 2026) bears the mention "S – D" for the convention of October 12, 2006 with Germany; the line of the 1959 convention does not bear this mention.

Resident: Article 2 § 4, not Article 4

The 1959 convention addresses dual residence in Article 2, paragraph 4(b). Article 4 deals with business profits. The order of priority is: permanent home, then center of vital interests, habitual residence, nationality, and agreement of the competent authorities.

Maximum deductions and key rules

Dividends: the 15 % and the case of individuals

The 15 % cap in Article 9 § 2 applies to all beneficiaries resident in the other State, including natural persons: no paragraph addresses them separately. The BOFiP (French Official Tax Bulletin) specifies that the French withholding tax under Article 119 bis 2 of the French General Tax Code (CGI) is capped at 15 % by the convention, and that dividends from a French subsidiary to a German parent company of at least 10 % "are exempt from any withholding tax.".

Capital gains: three rules and a five-year clause

Article 7 was rewritten by the 2015 amendment. Capital gains on real estate are taxable in the State where the real estate is located (§ 1). Securities that derive more than 50% of their value, directly or indirectly, from real estate at any time during the 365 days preceding the transfer are taxable in the State where the real estate is located (§ 4). For the purposes of this rule, real estate directly used by an entity for its own business activities is not taken into account. Other assets, including shares and units, are taxable only in the State of residence of the transferor (§ 5).

Section 6 is the special provision. When an individual has been resident in one State for five years or more and becomes resident in the other, Section 5 does not prevent the first State from taxing, under its domestic law, the capital gain realized during that individual's period of residence in that State on interests in a company resident in that State. When the first State taxes this capital gain following the transfer of residence, and the interests are subsequently sold and the gains are taxed in the other State under Section 5, the latter uses the value of the interests at the time of the transfer of residence as the acquisition value. If the sale price is lower than this value, the sale price is used by the first State to determine the capital gain.

Salaries: 183 days of the fiscal year, including executives

The basic rule in Article 13, paragraph 1, is that income from dependent employment is taxable in the state where the employment is performed. The exception in paragraph 4 is subject to three conditions: a stay in the other state not exceeding a total of 183 days "during the fiscal year"; an employer who is not a resident of that state; and remuneration not borne by a permanent establishment or place of business of the employer in that state. The relevant period is the fiscal year, not a rolling period. Management or executive positions in a company subject to corporation tax fall under the category of dependent employment (paragraph 7). Employees of temporary employment agencies are taxable in both states (paragraph 6).

Border workers: zone, 45 days, form 5011

Paragraph 5 of Article 13 imposes restrictions on cross-border workers only within their country of residence. Conditions: they must work in the border zone of one country, have their permanent residence in the border zone of the other, and return there daily. The zone includes municipalities located within 20 km of the border. The same rules apply to residents of French departments bordering the border who work in German municipalities within 30 km. No specific department is mentioned.

The French tax authorities specify the following conditions: reside in Alsace (Bas-Rhin or Haut-Rhin) or Moselle, work for a German private company located at least 30 km (as the crow flies) from the border, and return home daily. This status is maintained if the number of days worked away from home does not exceed 45. Income is taxed in France, but the German employer continues to withhold tax at source until an exemption is granted. The French resident submits form 5011 in triplicate. According to the BOFiP (2012 version), the exemption certificate is generally valid for three years, and the worker must have the information in section II of the form certified annually by their German employer. The 45-day grace period stems from the mutual agreement of February 16, 2006.

Article 13 organizes compensation between States, set at 1.5 % of the mass of annual gross remuneration of cross-border workers, reviewed every 5 years against a threshold of 44 % of the tax collected.

Pensions and public functions

Pensions and annuities, including sums paid under statutory social insurance, are taxable only in the beneficiary's state of residence (Article 13, paragraph 8). Public salaries and pensions are generally taxable only in the paying state, with the exception of nationality (Article 14).

Double taxation: the allocation on the French side

France eliminates double taxation through a tax credit (Article 20 § 2): German tax is not deductible. For dividends under Article 9 § 2, the credit equals the tax paid in Germany, capped at the corresponding French tax. For other income, it equals the corresponding French tax if the recipient was subject to German tax. Any overpayment of withholding tax must be claimed before the end of the fourth calendar year following payment, along with a certificate of residence issued by the tax authorities of the country of residence (Article 25 b).

Inheritance and gifts: the agreement of October 12, 2006

It targets inheritances of persons domiciled in one or both States and their gifts, from 3 April 2009. The taxes concerned are the gift tax in France and the Erbschaft- und Schenkungsteuer in Germany.

Article 4, paragraph 3, adds a rule for a person who holds the nationality of only one of the two states: they are considered domiciled only in that state if they had a clear intention not to maintain their domicile indefinitely in the other and had been domiciled there for a total of less than five years during the seven years preceding the death or the gift. On the French side, Article 11 allows for the deduction of German tax up to the amount of the French tax liability.

A cross-border worker spending 54 days away from home: a numerical example (fictitious profile)

Situation. A fictitious employee lives in Moselle and works for a German private company located within a 30 km radius. He returns home every evening. Three business trips require him to work away from home for 18, 12 and 9 days a year.

Issue. He wants to know if he remains below the 45-day threshold, and what happens if a fourth 15-day trip is added.

Strategy. He adds up his days away from home and compares the total to 45. He does the same calculation with the fourth trip.

Result. Three trips: 39 days, or 6 days of leeway. With the fourth trip: 54 days, or 9 days above the threshold. The 45-day tolerance is no longer respected; its consequences are not detailed here. Profile and days are fictitious.

What changes depending on your situation

• Your residence as defined by the convention and the nature of the income.
• The number of days spent away from your home or in each state.
• Your department of residence and the municipality of work, for the status of cross-border worker.
• The nature and location of your assets, and your nationality, for inheritance purposes.

This page does not address Articles 13(b), 13(c), 16 and 17, Article 5(4) of the 2006 Convention and its Protocol, the IFI, the entry into force of the 2015 Amendment, or the detailed effects of the MLI. No results are guaranteed.