The France-Austria tax treaty, article by article

The Convention on Income and Capital between France and Austria was signed in Vienna on March 26, 1993, subsequently amended in 2011, and modified by the Multilateral Convention (MLC). A separate convention governs inheritance. This page presents the articles we have reviewed, including a rule on the transfer of securities: the threshold of 25,130,000 observed over five years.

1993, 2011, 2019: three stages

The text from 1993. It came into force on September 1, 1994, and applies to income from 1995 onwards. The administrative list (BOI-ANNX-000306, version of April 29, 2026) classifies it as "IR – IF," income and wealth tax. The text specifically addresses, on the French side, the wealth tax (article 2); its application to the IFI (French real estate wealth tax) is not discussed here.

The 2011 amendment. Signed in Paris on May 23, 2011, it has been in force since May 1, 2012. It applies to periods or years beginning on or after January 1, 2011. Several articles, including article 26 on the exchange of information, are "as drafted by the amendment of May 23, 2011".

The CML. Austria is included in the list of conventions modified by the multilateral convention (BOI-ANNX-000511, version of April 29, 2026): January 1, 2019 for taxes withheld at source, July 1, 2019 for other taxes. The line refers to a consolidated version.

What we have read. Two consolidated texts: one incorporates the 2011 amendment and does not mention the CML; the other is amended by the CML. The latter adds a "Right to Benefits" clause at the beginning: a benefit of the agreement is not granted if it is reasonable to conclude, considering all the facts and circumstances, that its granting was one of the principal objectives of an arrangement or transaction that enabled it to be obtained, unless it is established that the granting would be consistent with the object and purpose of the relevant provisions. It also includes a note to Article 25 § 3 referring to the CML. Articles 4 § 3, 10 § 2 b), 13, 15, and 23 do not contain any CML notes. These readings were done using a summary tool; cross-referencing with the PDF is still recommended.

Maximum deductions and key rules

Resident of both States: the order of Article 4

A person is considered a resident if they are liable to tax in a State by reason of their domicile, residence, place of management, or a similar criterion. For an individual resident in both States, paragraph 2 applies four criteria in order: permanent home (then center of vital interests), habitual abode, nationality, and agreement between the authorities. A company is subject to taxation based on the location of its place of effective management.

Dividends: 15 %, and nothing more at source once 10 % of the capital is reached.

The source state may tax dividends. If the beneficial owner is a resident of the other state, the tax "may not exceed 15 percent of the gross amount of the dividends" (Article 10, paragraph 2(a)). An exception exists for companies: if the beneficial owner is a company subject to corporation tax that directly or indirectly holds at least 10% of the capital of the distributing company, the dividends are taxable only in the state of the beneficial owner (paragraph 2(b)).

Interest and royalties: the beneficiary's state

Interest (Article 11) and royalties (Article 12) are taxable only in the country of residence of the beneficial owner. The text does not specify any withholding tax rate. Between related parties, only the normal portion benefits from this rule.

Securities sales: the threshold of 25 % over five years

This is the most specific rule of this convention. Article 13, paragraph 3(a), places the taxation of gains on securities of a company in the State of residence of that company, when the transferor has held a "substantial interest." This criterion is met if the transferor, alone or with related persons, held rights to at least 25% of the company's profits at any time during the five years preceding the transfer.

The criterion is applied over a period of time, not solely to the date of the sale: according to the text, a stake reduced to 10 % at the time of the transfer is eligible if it reached 25 % during the five preceding years. The text provides an exception for restructuring operations (§ 3 b): when these gains are subject to a deferral of taxation in the first State under a regime specific to companies within the same group, a merger, a division, a contribution to a company, or a share exchange, they are taxable only in that first State, provided that the operation is carried out for serious economic reasons and not primarily to secure the benefit of this provision.

For real estate, the gain is taxable in the State where it is located (§ 1); shares in companies whose assets consist primarily of real estate follow the same rule (§ 2). Income from real estate located in the other State is also taxable there (Article 6).

Salary: 183 days over twelve consecutive months

Article 15 considers the state of residence, unless the employment is carried out in the other state. The exception in Article 15, paragraph 2, is subject to three conditions: a stay not exceeding 183 days in total "during any period of twelve consecutive months," an employer who is not a resident of the other state, and an expense that is not borne by a permanent establishment or fixed base of the employer in that state. The relevant period is therefore a rolling period, not the calendar year. The text does not contain any specific provisions for cross-border workers.

Pensions, public service, other income

Private pensions paid in respect of previous employment are taxable only in the recipient's state of residence (Article 18). Public salaries and pensions are taxable only in the state that pays them (Article 19, paragraph 1(a)). They are taxable only in the other state if the services, for which the salaries are paid, are rendered in that other state and if the person is a resident of that other state who holds its nationality without also holding the nationality of the first state (Article 19, paragraph 1(b)). Income not covered elsewhere is taxable only in the state of residence (Article 21).

Eliminating double taxation: the French tax credit

For a resident of France, income originating in Austria and taxable there is taken into account for the calculation of French tax, unless it is exempt from corporation tax under French law. Austrian tax is not deductible from this income; the recipient is entitled to a tax credit against French tax (Article 23 § 1 a)). For income covered by Article 10 § 2, Article 13 §§ 1, 2 and 3, Article 15 § 3, Article 16, and Article 17 §§ 1 and 2, the credit is equal to the tax paid in Austria, that is, the Austrian tax actually and definitively borne on this income: the text states that "this credit may not, however, exceed the amount of French tax corresponding to this income." For income not mentioned in this list, the credit is equal to the amount of the corresponding French tax. Point 7 of the protocol specifies the calculation of the corresponding French tax.

The method applied by Austria to its own residents is not detailed here.

Inheritance and gifts: a separate agreement from 1993

The Convention on Successions and Gifts was signed in Vienna on March 26, 1993. In force since September 1, 1994, it applies to deaths and gifts made on or after that date. The 2011 amendment also applies to these taxes.

It applies to the estates of persons domiciled, at the time of death, in one of the two States. Real estate is taxable in the State where it is located (Article 5). Assets not covered by Articles 5, 6 and 7, wherever located, are taxable only in the State of domicile (Article 8). When the deceased or the donor was domiciled in France, France taxes all assets according to its domestic legislation and grants, on this tax, a deduction equal to the tax paid in Austria; this deduction may not exceed the portion of the French tax corresponding to the assets on which it is granted (Article 11 § 1 a)).

Amicable procedure and exchange of information

A case must be submitted to the competent authority within three years of the first notification (Article 25). Article 26 governs the exchange of information "likely to be relevant"; the 2011 Additional Protocol does not require spontaneous or automatic exchange.

What this page does not cover

The effects of the CML beyond those mentioned above—tax credit and withholding tax, wealth (Article 22), the Austrian elimination method, and the IFI—are not detailed. They can be found in the consolidated text.

Threshold of 25 % over five years: numerical example (fictitious profile)

Situation. A fictitious French resident has held shares in an Austrian company for several years. His share of the profits fluctuated over the five years preceding the sale: 8, 12, 27, 18, and then 10. He is now selling his stake, which represents 10 of the company's shares.

Issue. He wonders whether Austria can tax his gain under Article 13 § 3 a), when he now only holds 10 %.

Strategy. It highlights the highest level of its participation over the five years preceding the sale and compares it to the 25 % profit threshold.

Result. The highest level is 27 %, reached three years before the sale: the threshold of 25 % is exceeded by 2 points. This condition is met. Without this year at 27 %, the highest level would be 18 %, or 7 points below the threshold. This test does not indicate the amount of tax, nor the effect of other clauses, including those related to restructuring. The profile and percentages are fictitious.

What changes depending on your situation

• Your residence as defined in Article 4.
• The nature of the income: dividend, interest, capital gain, salary, pension.
• Your participation history over the five years preceding a sale.
• The number of days spent in each state over twelve consecutive months.
• The nature and location of your assets, for inheritance or gift purposes.

An article should be read in light of the facts in your case. No outcome is guaranteed.