Returning to France from Spain: Article 95 bis, the IRNR and the return

Leaving Spain for France is first settled in Madrid: if you were a resident for at least ten of the fifteen tax periods preceding the last period to be declared, Article 95 bis of the Spanish Personal Income Tax Law (IRPF) may tax the unrealized capital gains on your securities at the time you lose residency. You then remain taxable in Spain, as a non-resident, on what you retain there. In France, your return triggers the obligation to declare your Spanish accounts and, under certain conditions, access the French expatriate tax regime. This section does not cover the Spanish formalities for deregistering your Spanish accounts or the detailed eligibility requirements for the French expatriate tax regime.

Article 95 bis: ten out of fifteen residences, then two thresholds

According to the Agencia Tributaria manual, this regime "claims to engrave the 'latent' patrimonial gain" on the shares or units of a taxpayer who loses their tax residence in Spain. Two additional conditions apply:

1. to have been a resident for at least ten of the fifteen tax periods preceding the last period to be declared; ;
2. holding securities with a market value exceeding €4,000,000; or, if this threshold is not met, a stake exceeding 25 % on the due date, with a market value exceeding €1,000,000. In this second case, only the securities representing this stake are concerned.

For a displaced worker who had opted for the special Spanish scheme, the ten-year period begins from the first period in which this scheme no longer applies. See the Spanish impatriate regime.

Capital gains are the difference between the market value of securities and their acquisition cost; listed securities are valued at their current price. This capital gain is included "in the taxable base corresponding to the last period that must be declared," through a supplementary self-assessment, without penalty, late payment interest, or surcharge, within the filing deadline of the first tax year in which taxpayer status is lost.

For a change of residence to another EU or EEA state with effective exchange of tax information, the Spanish Tax Agency (Agencia Tributaria) provides form 113, "Comunicación de datos relativos a las ganancias patrimoniales por cambio de residencia" (Communication of data relating to wealth upon change of residence). The conditions for a possible deferral are not detailed here: the relevant page of the 2025 manual could not be consulted.

After departure: the IRNR at 19 % or 24 % and the assets remaining in Spain

A non-resident without a permanent establishment is subject to non-resident income tax (NRIT). The Agencia Tributaria's general tax rate schedule shows 19 % for residents of the European Union, Iceland, Norway, and, as of July 11, 2021, Liechtenstein, and 24 % for other taxpayers listed in the schedule. The relevant line can be found in your tax file. Dividends, interest, and other capital gains are also included in the 19 % rate.

For rental income, residents of the European Union and the EEA can deduct certain expenses directly related to income earned in Spain. For a property rented out for part of the year, the months not rented are deducted from 1.1 % or, as the case may be, 2 % of the cadastral value.

Wealth tax follows the same logic. Spanish residents are taxed on a personal basis; non-residents are taxed on a real basis, for their assets located, exercisable, or enforceable in Spain. A non-resident may apply the regulations of the autonomous community where the greatest value of their assets is located. The 2025 manual sets a general minimum exemption of €700,000 unless otherwise decided by the autonomous community, and a mandatory declaration for assets exceeding €2,000,000 in value when no quota is payable.

Inheritance and gifts: two texts to read together

For Spanish inheritance and gift tax, the Agencia Tributaria's page for non-residents indicates that all taxpayers can choose between the state or regional tax rules, with one exception: for sums received from assurance-vie policies not included in the estate, only the state rules apply. The deadline is six months from the date of death for an inheritance and thirty working days for a gift; the relevant forms are 650 and 651.

The Franco-Spanish convention of January 8, 1963, supplements this framework for the estates of individuals who were residents of France or Spain at the time of death (Articles 29 to 38). Real estate is taxed only in the state where it is located (Article 30). Intangible assets, including bank accounts, are taxed only in the state of which the deceased was a resident (Article 34). Each state may calculate the tax at the rate applicable to all assets (Article 36).

The 1995 convention during the year of return

If both Spain and France consider you a resident in the year of your return, Article 4 of the 1995 convention differentiates between them: permanent home, center of vital interests, habitual residence, nationality, and then amicable agreement. For Spain, residence is calculated based on days in the calendar year (more than 183 days) or the center of economic interests; for France, the convention's concept of residence takes precedence over domestic tax domicile. Dividends are subject to a maximum of 15% of the gross amount at source (Article 10). The text also provides, under certain conditions (at least 10% of the capital held for 365 days), for taxation solely in the beneficiary's country of residence when the beneficiary is a company. Private pensions are taxed in the country of residence (Article 18), and France grants a tax credit for Spanish-source income taxable in Spain (Article 24).

In France: declare the year of return

If you had no tax obligations in France before your return, you must declare all income received from your return date until December 31st on form 2042 in the following year (N+1). If you had French-source income before your return, the period of non-residence is declared on form 2042-NR and the period of residence on form 2042. If you are declaring your income or assets in France for the first time, this initial declaration must be filed on paper. A former non-resident who had already filed a tax return in France (form 2042-NR) must file online, unless this is physically impossible.

Update your address in your online tax account, along with your bank details and withholding tax information. Form 2043, used to update withholding tax or advance payments, is required if you had no French-source income before returning. If you had such income, the Non-Resident Tax Office handles your case; otherwise, it's the office of your new address. Tax residency is determined based on three alternative criteria: home or main residence, main occupation, and center of economic interests.

Accounts, contracts and digital assets opened in Spain

As soon as you are domiciled in France, your bank accounts, assurance-vie policies, and digital asset accounts opened, held, used, or closed abroad must be declared with your income tax return, on form 3916 or 3916 bis. Failure to declare costs €1,500 per undeclared account, and the tax authorities may tax presumed income with a surcharge of 40% (Article 1649 A). See the... accounts and contracts abroad.

Expatriates and relief from the French exit tax

The expatriate tax regime requires that you have been a tax resident outside France for the five calendar years preceding your appointment and that you transfer your tax residence to France. It runs until December 31st of the eighth calendar year following your appointment: exemption from the expatriation bonus, exemption from the 50% tax on certain foreign-source income, a flat-rate option of 30%, an overall cap, and the French wealth tax (IFI) limited to real estate located in France until December 31st of the fifth year. Detailed conditions are not covered here; see [link to relevant section]. impatriates and the exemption of 50 %.

If you left France with an exit tax on hold, re-establishing your tax residence in France may give rise to relief or a refund, provided that the securities are still held on the date of return.

A landlord returning with a rented apartment in Madrid: a numerical example (fictitious profile)

Situation. A fictitious executive was a Spanish resident for 12 of the 15 tax periods preceding the last period to be reported. He owns 30 shares in a company; the market value of his shares is €3,200,000 (assuming a company value of approximately €10,666,667). He rents an apartment in Madrid for €18,000 per year. He is returning to live in France.

Issue. He wants to know if Article 95 bis applies to his securities and what Spanish tax his non-resident rental income is subject to.

Strategy. He tests the two conditions in the manual on the market value of his securities, applies by hypothesis the rate of 19 % from the IRNR table to his gross rents and validates the deductible expenses before filing.

Result. The 12 periods exceed the minimum of 10. The first condition fails: €3,200,000 does not exceed €4,000,000. The second condition is met: 30 % exceed 25 %, and the market value of its shares, €3,200,000, exceeds €1,000,000 (the manual refers to the market value of the shares held in the company, not the company's value). Article 95 bis therefore applies based on the second condition only; the capital gain is then calculated using the acquisition price, which the example does not provide. Regarding the rents, €18,000 × 19 % = €3,420 before any deduction of expenses.

What changes depending on your situation

• The number of periods spent as a resident of Spain and the nature of your titles.
• The value of your shares in relation to the thresholds of €4,000,000 and €1,000,000.
• Assets you hold in Spain: rents, property, future inheritance.
• The exact date of the loss of Spanish residence and the re-establishment of French residence.

No result is guaranteed in advance: each point must be read in light of the documents in your file.