France

This Convention applies to persons resident in one or both Contracting States.

1. This Convention applies to income and property taxes payable by each of the Contracting States, or by their territorial entities, whatever the system of their levy.

2. Income and property taxes are those that tax all or any part of the income or property, including taxes on profits resulting from the disposal of movable or immovable property, taxes on the amount of wages or salaries paid by enterprises, as well as taxes on capital gains.

3. The current taxes to which this Convention specifically applies are:

(a) In Spain:

(i) Personal Income Tax.

(ii) Corporate Tax.

(iii) Property Tax.

(iv) Local taxes on income and on property (hereinafter referred to as the Spanish tax).

(b) In France:

(i) Income tax (l’impôt sur le revenu).

(ii) Corporation Tax.

(iii) The Salary Tax (the taxe sur les salaires).

(iv) The Solidarity Tax on Wealth.

And all withholding taxes at source, all advance and account payments considered as income or property taxes for the purposes of paragraph 2 (hereinafter referred to as ‘French tax’).

4. The Convention shall also apply to taxes of an identical or similar nature which are established after the date of signature of the Convention and which are added to or replaced by existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes made to their respective tax laws.

1. For the purposes of this Convention, unless the context of the Convention is different:

(a) The terms ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or France according to the context.

(b) The term ‘Spain’ means the Spanish State and, used geographically, designates the territory of the Spanish State, including areas outside its territorial sea, in which, under international law and under its domestic law, the Spanish State may exercise rights of sovereignty over the natural resources of the seabed, its subsoil and its superjacent waters.

(c) The term 'France' means the European and overseas departments of the French Republic, including its territorial sea and areas outside it, in which, under international law, the French Republic holds sovereign rights for the purposes of exploration and exploitation of natural resources from the seabed, its subsoil and its superjacent waters.

(d) The term ‘person’ includes natural persons, companies and any other grouping of persons.

(e) the term 'company' means any legal person or any entity that is considered a legal person for tax purposes.

(f) The terms ‘undertaking of one Contracting State’ and ‘undertaking of the other Contracting State’ mean, respectively, an undertaking operated by a resident of one Contracting State and an undertaking operated by a resident of the other Contracting State.

(g) “International traffic” means any transport by a ship or aircraft operated by an undertaking whose effective headquarters are located in a Contracting State, except where the ship or aircraft is operated only between points located in the other Contracting State.

(h) ‘competent authority’ means:

(I) In the case of Spain, the Minister of Economy and Finance or his authorized representative.

(II) In the case of France, the Minister responsible for the budget or his authorized representative.

2. For the purposes of the application of the Convention by a Contracting State, any expression not defined therein shall have, unless a different interpretation is given in its context, the meaning attributed to it by the law of that State, concerning the taxes which are the subject of the Convention.

1. For the purposes of this Convention, the term ‘resident of a Contracting State’ means any person who, under the law of that State, is subject to taxation in that State on the basis of his domicile, residence, address or any other criterion of a similar nature. However, this term does not include persons who are subject to taxation in this State solely on the income they obtain from sources located in that State, or on the property they possess in that State.

2. Where, under the provisions of paragraph 1, a natural person is resident in both Contracting States, his or her situation shall be resolved as follows:

(a) This person shall be considered a resident of the State in which he or she has permanent housing at his or her disposal; if he or she has permanent housing at his or her disposal in both States, he or she shall be considered a resident of the State in which he or she maintains closer personal and economic relations (centre of vital interests).

(b) If the State in which the person has the centre of his or her vital interests cannot be determined, or if he or she does not have permanent housing at his or her disposal in any of the States, he or she shall be considered a resident of the Contracting State in which he or she habitually lives.

(c) If he lives habitually in both States or does not live in either State, he or she shall be considered resident of the State of which he or she is a national.

(d) If he is a national of either State or is not a national of either State, the competent authorities of the two Contracting States shall decide the case by mutual agreement.

3. Where under the provisions of paragraph 1 a person other than a natural person is a resident of both Contracting States, he shall be considered a resident of the State in which his place of effective management is located.

1. For the purposes of this Agreement, the term ‘permanent establishment’ means a fixed place of business through which an undertaking carries out all or part of its activity.

2. The term ‘permanent establishment’ includes, in particular:

(a) Management offices.

(b) Branches.

(c) Offices.

(d) Factories.

(e) Workshops.

(f) Mines, oil or gas wells, quarries or any other natural resource extraction site.

3. A construction, installation or assembly work only constitutes a permanent establishment if its duration exceeds twelve months.

4. Notwithstanding the provisions of this Article, it is considered that the term ‘permanent establishment’ does not include:

(a) The use of facilities for the sole purpose of storing, displaying or delivering goods or goods belonging to the enterprise.

(b) The maintenance of a warehouse of goods or goods belonging to the enterprise for the sole purpose of storing, displaying or delivering them.

(c) The maintenance of a deposit of goods or goods belonging to the undertaking for the sole purpose of their processing by another undertaking.

(d) The maintenance of a fixed place of business for the sole purpose of purchasing goods or goods or collecting information for the enterprise.

(e) The maintenance of a fixed place of business for the sole purpose of carrying out any other auxiliary or preparatory activity for the enterprise.

(f) The maintenance of a fixed place of business for the sole purpose of the combined exercise of the activities referred to in points (a) to (e), provided that the whole activity of the fixed place of business retains its auxiliary or preparatory character.

5. By way of derogation from paragraphs 1 and 2, where a person — other than an agent enjoying an independent status, to which paragraph 6 applies — acts on behalf of an undertaking and maintains and exercises habitually in a Contracting State powers to conclude contracts on behalf of the undertaking, that undertaking shall be deemed to have a permanent establishment in that State in respect of all the activities carried out by that person on behalf of the undertaking, unless the activities of that person are limited to those referred to in paragraph 4 and if they have been carried out through a fixed place of business, that place would not have been regarded as a permanent establishment in accordance with the provisions of that paragraph.

6. An undertaking is not considered to have a permanent establishment in a Contracting State merely because it carries out its activities through a broker, a general commissioner or any other agent enjoying an independent status, provided that such persons act within the ordinary framework of their activity.

7. The fact that a company resident of a Contracting State controls or is controlled by a company resident of the other Contracting State, or that it carries out activities in that other State (whether by permanent establishment or otherwise), does not by itself make any of these companies permanent establishment of the other State.

1. Income from immovable property (including income from agricultural or forestry holdings) situated in the other Contracting State from a resident of one Contracting State may be taxed in that other State.

2. The term ‘real property’ shall have the meaning attributed to it by the law of the Contracting State in which the property in question is situated. This term in any case includes accessories, livestock and equipment used on farms and forestry, rights to which private law provisions on real estate apply, usufruct of real estate and rights to variable or fixed payments for the exploitation or concession of mineral deposits, sources and other mineral resources; ships and aircraft are not considered real property.

3. The provisions of paragraph 1 apply to income derived from direct use, lease or shareholding, as well as from any other form of exploitation of immovable property.

4. The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of an undertaking and from immovable property used for independent work.

5. Where the ownership of shares, shares or other rights in a company or other legal person confers on its owner the enjoyment of immovable property situated in a Contracting State and held by that company or other legal person, the income obtained by the owner from the direct use, lease or any other form of use of such rights may be subject to taxation in that State. The provisions of this paragraph shall apply without prejudice to Articles 7 and 14.

1. The profits of an undertaking in a Contracting State may be taxed only in that State unless the undertaking carries out its activity in the other Contracting State by means of a permanent establishment situated in that State. If the undertaking does so, the profits of the undertaking may be taxed in the other State, but only to the extent that they can be attributed to this permanent establishment.

2. Without prejudice to paragraph 3, where an undertaking of one Contracting State carries out its activity in the other Contracting State by means of a permanent establishment situated therein, in each Contracting State the profits which the latter could have obtained from being a separate undertaking carrying out identical or similar activities under the same or similar conditions shall be attributed to that establishment and shall deal entirely independently with the undertaking from which it is a permanent establishment.

3. For the purpose of determining the benefit of the permanent establishment, the deduction of expenses incurred for the realization of the purposes of the permanent establishment, including management and general administrative expenses for the same purposes, shall be permitted, whether incurred in the State in which the permanent establishment is located or elsewhere.

4. As long as it is customary in a Contracting State to determine the profits attributable to permanent establishments on the basis of a distribution of the total profits of the undertaking among its various parties, the provisions of paragraph 2 shall not prevent that Contracting State from determining the taxable profits in this way; however, the method of distribution adopted shall be such that the result obtained is in accordance with the principles contained in this Article.

5. No benefit shall be attributed to a permanent establishment merely because it buys goods or goods for the undertaking.

6. For the purposes of the preceding paragraphs, the profits attributable to the permanent establishment shall be calculated each year by the same method, unless there are valid and sufficient grounds for proceeding otherwise.

7. Where profits include separate income covered by other articles of this agreement, the provisions of those articles shall not be affected by those of this Article.

1. Profits from operating ships or aircraft in international traffic may be taxed only in the Contracting State in which the effective head office of the undertaking is situated.

2. If the place of effective management of a shipping undertaking is on board a ship, it shall be deemed to be in the Contracting State where the base port of the ship is located, and if there is no such base port, in the Contracting State in which the person operating the ship resides.

3. The provisions of paragraph 1 also apply to profits from participation in a group or pool, on a joint holding or in an international operating body.

1. When:

(a) An undertaking of a Contracting State participates directly or indirectly in the direction, control or capital of an undertaking of the other Contracting State; or

(b) the same persons participate directly or indirectly in the direction, control or capital of an undertaking of a Contracting State and of an undertaking of the other Contracting State,

and in either case the two companies are, in their commercial or financial relations, bound by accepted or imposed conditions which differ from those which would be agreed by independent undertakings, the profits which would have been obtained by one of the undertakings in the absence of these conditions, and which in fact did not occur because of them, may be included in the profits of that undertaking and subject to taxation accordingly.

2. Where a Contracting State includes in the profits of an undertaking of that State - and consequently subjects to taxation - the profits on which an undertaking of the other Contracting State has been subject to taxation in that other State, and the profits thus included are profits which would have been realized by the undertaking of the first State if the terms agreed between the two undertakings had been those agreed between two independent undertakings, that other State shall adjust the corresponding amount of the tax it has received on those profits if it considers that this adjustment is justified. In determining this adjustment, the other provisions of this Convention shall be taken into account and the competent authorities of the Contracting States shall be consulted where necessary.

1. Dividends paid by a company resident of one Contracting State to a resident of the other Contracting State may be taxed in that other State.

2. (a) The dividends referred to in paragraph 1 may also be taxed in the Contracting State in which the company paying the dividends resides and in accordance with the law of that State, but if the recipient of the dividends is the beneficial owner, the tax thus required may not exceed 15 per cent of the gross amount of the dividends.

(b) However, such dividends may only be taxed in the Contracting State of which the beneficial owner is a resident, if the beneficial owner is a corporation subject to corporation tax which is:

(i) A resident of France who directly detains at least 10 per cent of the capital of the company paying the dividends; or

(ii) A resident of Spain who holds a substantial stake in the company that pays the dividends.

The provisions of this paragraph do not affect the company’s taxation in respect of profits from which dividends are paid.

3. (a) A resident of Spain who receives dividends from a company which is resident of France from which he is the beneficial owner and which would give entitlement to a ‘tax credit’ (‘tax avoir’) if they are received by a resident of France shall be entitled to a payment by the French Treasury equal to that ‘tax credit’ (‘tax avoir’), without prejudice to the tax provided for in paragraph 2 (a) of this Article.

(b) The provisions of point (a) of this paragraph apply only to a resident of Spain who is:

(i) a natural person; or

(ii) A company that does not hold a substantial stake in the company that pays dividends.

(c) The provisions of point (a) of this paragraph apply only to the beneficial owner of dividends subject to Spanish tax on account of these dividends and payment by the French Treasury.

(d) In the case of a company, the provisions of point (a) of this paragraph do not apply if the company which is the actual beneficiary of the dividends is not the owner of the holding for which the dividends are paid or if the main purpose of the holding of that holding, or as one of its main objects, is to enable another person, whether or not resident of a Contracting State, to obtain the advantages of the provisions of point (a) of this paragraph.

(e) Unless a resident of Spain who receives dividends paid by a company resident of France does not receive the benefit of the payment from the French Treasury referred to in point (a) of this paragraph, he or she may obtain a refund of the withholding tax in so far as it has actually been paid by the company on account of those dividends. The provisions of paragraph 2 shall apply to the gross amount of such withholding tax.

(f) The gross amounts of the payment by the French Treasury and the withholding tax referred to in points (a) and (e) of this paragraph are treated as dividends for the purposes of the application of this Agreement.

4. (a) The term ‘dividends’ used in this Article means the income from shares, shares or enjoyment bonds, parts of mines, parts of founders or other rights, except credit rights, which permit participation in profits, as well as income subject to the benefit-sharing regime under the tax law of the Contracting State in which the distributing company resides.

(b) For the purposes of paragraphs 2(b)(ii) and (b)(ii) of paragraph 3, a company is considered to hold a substantial stake in the company that pays dividends when it directly or indirectly holds at least 10 per 100 of the company's capital.

5. The provisions of paragraphs 1, 2 and 3 do not apply if the beneficial owner of the dividends, resident of one Contracting State, exercises in the other Contracting State, of which the company that pays the dividends is resident, an industrial or commercial activity through a permanent establishment located here, or provides independent work through a fixed base located here, with which the share generated by the dividends is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

6 Where a company resident of one Contracting State obtains profits or income from the other Contracting State, that other State may not require any tax on dividends paid by the company, except to the extent that these dividends are paid to a resident of that other State or the share generated by the dividends is effectively linked to a permanent establishment or a fixed base situated in that other State, or subject the undistributed profits of the company to a tax on them, even if the dividends paid or the undistributed profits consist, in whole or in part, of profits or income from that other State.

1. Interest from one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, these interests may also be subject to taxation in the Contracting State from which they come and in accordance with the law of that State, but if the recipient of the interest is the beneficial owner, the tax thus required may not exceed 10 per cent of the gross amount of interest.

3. Notwithstanding the provisions of paragraph 2, the interest referred to in paragraph 1 may be taxed only in the Contracting State in which the recipient of the interest resides, if this is the beneficial owner of the interest and if the interest is paid:

(i) By the other Contracting State or one of its territorial entities; or

(ii) By an undertaking of that other State to an undertaking of the first State in the context of an industrial or commercial activity; or

(iii) In connection with the sale on credit of industrial, commercial or scientific equipment; or

(iv) For a loan, whatever the nature of the loan granted by a credit institution.

4. The term ‘interest’, used in this Article, means the income from claims of any kind, with or without mortgage guarantees or a benefit-sharing clause of the debtor, and in particular income from public funds and bonds or bonds, including premiums and lots attached to such securities, as well as any other income assimilated to income derived from borrowed amounts, by the tax legislation of the Contracting State from which the income comes. Penalizations for late payment are not considered as interest within the meaning of this article. The term ‘interest’ does not cover the part of the yield considered to be a dividend under the provisions of Article 10.

5. The provisions of paragraphs 1, 2 and 3 do not apply if the beneficial owner of the interest, resident of one Contracting State, exercises in the other Contracting State, from which the interest derives, an industrial or commercial activity through a permanent establishment located in that other State or provides professional services through a fixed base situated therein, with which the credit generating the interest is effectively linked. In such cases, the provisions of article 7 or article 14, as appropriate, apply.

6. Interest is considered to come from a Contracting State where the debtor is a resident of that State. However, where the debtor of interest, whether or not resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed basis in respect of which the debt giving rise to the payment of the interest and bearing the burden thereof has been incurred, the interest shall be regarded as originating in the Contracting State where the permanent establishment or fixed base is situated.

7. Where, on account of the special relations between the debtor and the beneficial owner of the interest or the interest between them and third parties, the amount of interest paid, taking into account the claim for which it is paid, exceeds that agreed upon by the debtor and the creditor in the absence of such relations, the provisions of this article apply only to the latter amount. In this case, the excess may be subject to taxation in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

1. Fees from one Contracting State and paid to a resident of the other Contracting State may only be taxed in that other State.

2. (a) Notwithstanding point (b), the fees referred to in paragraph 1 may also be taxed in the Contracting State from which they come and in accordance with the law of that State, but if the recipient of the fees is the beneficial owner, the tax thus established may not exceed 5 per cent of the gross amount of the fees.

(b) Remuneration of any kind from a Contracting State and paid to a resident of the other Contracting State for the use or grant of a copyright on a literary or artistic work (excluding cinematographic films and recorded sound or visual works) is subject to taxation in that other State only if the recipient is the beneficial owner.

3. The term ‘royalties’ used in this Article means quantities of any kind paid for the use or grant of a copyright on a literary, artistic or scientific work, including cinematographic films, of a patent, trademark or trade mark, design, plan, formula or secret procedure, as well as for the use or grant of use of industrial, commercial or scientific equipment, and for information relating to industrial, commercial or scientific experiences (‘know-how’).

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the royalties, resident of one Contracting State, exercises in the other Contracting State, from which the royalties come, an industrial or commercial activity through a permanent establishment located in that other State or provides professional services through a fixed base situated therein, with which the right or ownership for which the royalties are paid is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

5. The royalties are considered to come from a Contracting State when the debtor is a resident of that State. However, where the debtor of the royalties, whether or not he is resident of a Contracting State, has in one of the Contracting States a permanent establishment or a fixed basis, with which the right or ownership for which the royalties are paid is effectively linked and bearing the burden thereof, the royalties shall be deemed to come from the State where the permanent establishment or fixed base is located.

6. Where, on account of the special relations between the debtor and the beneficial owner of the royalties or of those which both maintain with third parties, the amount of the royalties paid, taking into account the benefit for which they are paid, exceeds that for which the debtor and the beneficial owner would have agreed in the absence of such relationships, the provisions of this article apply only to the latter amount. In this case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

1. (a) Profits that a resident of one Contracting State obtains from the disposal of immovable property, as defined in article 6, located in the other Contracting State, may be taxed in that other State.

(b) Profits arising from the disposal of shares, shares or other rights in a corporation or legal entity whose assets are principally constituted, directly or through the interposition of one or more corporations or legal entities, by immovable property located in a Contracting State or rights in such assets, may be subject to taxation in that State.

2. (a) Profits arising from the disposal of shares, shares or other rights [other than shares, shares or rights covered by paragraph 1(b)] which constitute a substantial participation in a company which is resident of a Contracting State may be subject to taxation in that State. A substantial participation is considered to exist when the transferor, alone or with related persons, stops directly or indirectly at any time during the twelve months preceding the date of transmission:

(i) at least 25 per cent of the capital of this company; or

(ii) Shares, shares or other rights which, as a whole, entitle at least 25 per cent of the profits of the company.

(b) However, where profits arising from the alienation by a resident of a Contracting State of shares, shares or other rights constituting a substantial participation in a company which is a resident of the other Contracting State are the subject of a tax deferral in the first State in accordance with its law, under a specific tax regime for companies of the same group or of a merger, division, transfer of assets, or exchange of shares, such gains may only be subject to taxation in the former State.

3. Profits arising from the disposal of movable property forming part of the assets of a permanent establishment held by an undertaking of one Contracting State in the other Contracting State, or from movable property belonging to a fixed basis held by a resident of one Contracting State in the other Contracting State for the purpose of providing independent work, including gains arising from the disposal of that permanent establishment (only or with the enterprise as a whole) or from that fixed basis, may be taxed in that other State.

4. Profits arising from the disposal of ships or aircraft operated in international traffic, or from movable property affected by the operation of such vessels or aircraft, may only be taxed in the Contracting State where the effective head office of the undertaking is located.

5. Profits resulting from the disposal of any property other than those referred to in paragraphs 1, 2, 3 and 4 may be taxed only in the Contracting State in which the transferor resides.

1. Income earned by a resident of a Contracting State through the provision of professional services or other activities of an independent nature may only be taxed in that State unless the resident has a fixed basis for the pursuit of his or her activities in the other Contracting State on a regular basis. If it has such a fixed base, income may be taxed in the other State, but only to the extent that it is attributable to this fixed base.

2. The term “professional services” includes, in particular, independent scientific, literary, artistic, educational or pedagogical activities, as well as independent activities of Physicians, Lawyers, Engineers, Architects, Dentistry and Accountants.

1. Without prejudice to Articles 16, 18, 19 and 20, salaries, salaries and similar remuneration obtained by a resident of a Contracting State on account of employment may only be taxed in that State unless the employment is exercised in the other Contracting State. If the employment is exercised here, the remuneration received for this purpose may be subject to taxation in this other State.

2. By way of derogation from paragraph 1, remuneration obtained by a resident of a Contracting State on the basis of employment in the other Contracting State may only be taxed in the first State if:

(a) The recipient does not remain in total in the other State, in one or more periods, more than one hundred and eighty-three days during any period of twelve consecutive months; and

(b) Remuneration is paid for or on behalf of an employer who is not a resident of the other State; and

(c) Remuneration is not borne by a permanent establishment or a fixed basis which the employer has in the other State.

3. Notwithstanding the provisions of paragraphs 1 and 2, renumerations obtained on account of employment carried out on board a ship or aircraft operated in international traffic may be subject to taxation in the Contracting State in which the place of effective management of the undertaking is situated.

1. Assistance allowances and other similar allowances which a resident of a Contracting State obtains as a member of a Board of Directors or a supervisory body of a company resident of the other Contracting State may be taxed in that other State.

2. The income obtained by the persons referred to in paragraph 1 by any other means is covered, by its nature, by the provisions of the other articles of this Convention.

1. By way of derogation from Articles 14 and 15, any income which a resident of a Contracting State obtains from the exercise of his personal activity in the other Contracting State, as a performer, theatre, cinema, radio and television actor, or musician, or as an athlete, may be subject to taxation in that other State.

2. By way of derogation from Articles 7, 14 and 15, where the income derived from the activities carried out by an artist or sportsman, personally and as such, is attributed, not to the artist or sportsman himself, but to another person, such income may be taxed in the Contracting State in which the activities of the artist or sportsman are carried out.

3. Notwithstanding the provisions of paragraphs 1 and 14 and 15, income derived from the activities carried out personally and as such by a performer or sportsman resident of a Contracting State in the other Contracting State may be taxed in the first Contracting State only when such activities carried out in the other State are financed mainly by public funds of the first State, its territorial entities or its legal persons governed by public law.

4. Notwithstanding the provisions of Articles 7, 14 and 15(2), where the income derived from the activities carried out by a performer or an athlete, personally and as such, resident of a Contracting State, in the other Contracting State, is attributed, not to the artist or sportsman himself, but to another person, such income may be taxed in the first Contracting State only if the other person is financed mainly by public funds of that other State, its territorial entities, or its legal persons governed by public law.

Without prejudice to Article 19(2), pensions and similar remuneration paid to a resident of a Contracting State on account of previous employment may only be taxed in that State.

1. (a) Remuneration, excluding pensions, paid by a Contracting State, one of its territorial entities or by one of its legal persons governed by public law to a natural person, for services rendered to that State or to that entity or to that legal person governed by public law, may be subject to taxation only in that State.

(b) However, such remuneration may be subject to taxation in the other Contracting State only if the services are provided in that State and the natural person is a resident and national of that State, without at the same time possessing the nationality of the first State.

2. (a) Pensions paid by a Contracting State or by one of its territorial entities or one of its legal persons governed by public law, either directly or from constituted funds, to a natural person on the basis of services rendered to that State or to that entity or to that legal person governed by public law, may only be subject to taxation in that State.

(b) However, such pensions may be subject to taxation in the other Contracting State only if the natural person is a resident and a national of that State without, at the same time, having the nationality of the first State.

3. The provisions of Articles 15, 16 and 18 apply to remuneration and pensions paid for services provided within the framework of an industrial or commercial activity carried out by a Contracting State or one of its territorial entities or one of its legal persons governed by public law.

A natural person who is a resident of a Contracting State, when he begins his stay in the other Contracting State and who, at the invitation of the Government of that other State or of an officially recognized University or educational institution located in that State, remains in that State for the main purpose of teaching or engaging in research, or for both activities, at an officially recognized University or educational institution, may be subject to taxation in the first State only on the basis of income derived from such activities, for a period not exceeding two years, from the date of his arrival in the other State.

The amounts received to cover the costs of maintenance, study or training of a student or a person in training who is or has been, immediately before arriving in a Contracting State, resident of the other Contracting State and who is in the first State for the sole purpose of continuing his studies or training, may not be subject to taxation in that State provided they come from sources outside that State.

1. The income of a resident of a Contracting State, whatever its source, the resident being its beneficial owner, and not referred to in other articles of this Convention, may only be taxed in that State.

2. Paragraph 1 does not apply to income, excluding that derived from property defined as immovable in Article 6(2), where the beneficiary of such income, resident of a Contracting State, carries out in the other Contracting State an industrial or commercial activity by means of a permanent establishment situated therein or provides professional services by means of a fixed base also situated therein, with which the right or ownership for which the income is paid is effectively linked. In such cases, the provisions of article 7 or article 14, as appropriate, apply.

1. (a) Property constituted by immovable property covered by article 6 owned by a resident of one Contracting State and situated in the other Contracting State may be taxed in that other State.

(b) Property constituted by shares, shares or other rights in a corporation or legal entity whose assets are principally constituted, directly or through the establishment of one or more corporations or legal entities, by immovable property located in a Contracting State or by rights in such assets may be subject to taxation in that State.

2. Property consisting of shares, shares or other rights (other than shares, shares or rights covered by paragraph 1(b)) which constitute a substantial holding in a company which is resident of a Contracting State may be subject to taxation in that State. A substantial participation is considered to exist when a natural person, alone or with related persons, directly or indirectly:

(i) At least 25 per cent of the company's capital; or

(ii) Shares, shares or other rights which together entitle at least 25 per cent of the profits of the company.

3. Property consisting of movable property forming part of the assets of a permanent establishment held by an undertaking of one Contracting State in the other Contracting State or of movable property belonging to a fixed basis which a resident of one Contracting State has in the other Contracting State for the provision of independent work may be subject to taxation in that other State.

4. Assets made up of ships or aircraft operated in international traffic, as well as movable property affected by the operation of such vessels or aircraft, may be taxed only in the Contracting State in which the place of effective management of the undertaking is situated.

5. All other assets of a resident of a Contracting State may be subject to taxation only in that State.

6. Notwithstanding the foregoing provisions of this Article, for the purpose of imposing a solidarity tax on the assets of a natural person who is resident of France and who has Spanish nationality without having French nationality, property situated outside France which that person holds on 1 January of each of the five calendar years following that in which he becomes resident of France, does not form part of the taxable base corresponding to each of these five years. If the person ceases to be a resident of France for a period of at least three years, and then returns to be a resident of France, the property situated outside France which he holds on 1 January of each of the five calendar years following which he returns to be a resident of France shall not form part of the taxable amount corresponding to each of these five years.

1. In France, double taxation shall be avoided as follows:

(a) Revenues which come from Spain and which may, or are subject to taxation only, in this State in accordance with the provisions of this Convention are taken into account for the calculation of the French tax where the beneficiary is a resident of France and such income is not exempt from corporation tax under French law. In this case, the Spanish tax is not deductible from these incomes, but the beneficiary is entitled to a tax credit attributable to the French tax. This tax credit is the same:

(i) for all income not referred to in paragraph II, the amount of the French tax corresponding to these income;

(ii) For the income referred to in Article 10(2), Article 11(2), Article 12(2)(a), Article 13(2), Article 15(3), Article 16(1) and Article 17(1) and (2), the amount of tax paid in Spain in accordance with the provisions of these Articles; this credit may in no case exceed the share of the French tax corresponding to these income.

(b) A resident of France who possesses assets liable to be taxed in Spain, in accordance with the provisions of Article 23(1), (2) or (3), may also be taxed in France on the basis of those elements. The French tax shall be calculated by deducting a tax credit equal to the amount of the Spanish tax paid on account of the estate. This deduction may not exceed the part of the French tax corresponding to that estate.

2. As regards Spain, double taxation is avoided in accordance with the provisions of Spanish domestic law and the following provisions:

(a) Where a resident of Spain obtains income or possesses property, which under the provisions of this Convention may be taxed in France, Spain shall grant, on the tax levied on the income or property of that resident, a deduction equal to the part of the tax paid in France. However, this deduction may in no case exceed the part of the Spanish tax calculated before the deduction, corresponding, as the case may be, to the income or wealth that may be taxed in France.

(b) In the case of dividends paid by a company that is resident of France, or a company that is resident of Spain and that holds directly at least 10 per 100 of the capital of the company that pays the dividends, Spain shall grant the deduction of the tax actually paid by the first company corresponding to the profits from which the dividends are paid, in the amount corresponding to those dividends, provided that that amount is included in the tax base of the company that receives the dividends. This deduction may in no way exceed the part of the income tax, calculated before the deduction, corresponding to the income subject to taxation in France.

For the implementation of the provisions of the preceding paragraph, participation in the dividend paying company shall be at least 10 per cent and shall have been maintained continuously for the two immediate years preceding the day on which the dividends are paid.

(c) Where, in accordance with any provision of the Convention, the income received by a resident of Spain, or the property he possesses, is exempt from tax in Spain, Spain may, however, take into account the exempt income or wealth, for the purpose of calculating the amount of tax on the rest of the income or property of that resident.

1. Natural persons possessing the nationality of a Contracting State shall not be subject in the other Contracting State to any tax or obligation relating thereto which is not or is more burdensome than those to which natural persons possessing the nationality of that other State who are under the same conditions are or may be subject. Notwithstanding Article 1, this provision also applies to natural persons who are not residents of a Contracting State or any of them.

2. Permanent establishments held by an undertaking of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than undertakings of that other State carrying out the same activities. This provision cannot be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, reliefs and tax reductions it grants to its own residents in view of their marital status or family burdens.

3. Unless the provisions of Article 9(1); Article 11(7) or Article 12(6) apply, interest, royalties or other expenses paid by an undertaking of a Contracting State to a resident of the other Contracting State are deductible, in order to determine the profits subject to taxation of that undertaking, under the same conditions as if they had been paid to a resident of the former State. Likewise, the debts of an undertaking of a Contracting State, relating to a resident of the other Contracting State, are deductible for the determination of the taxable assets of that undertaking, under the same conditions as if they had been contracted with a resident of the former State.

4. Undertakings of a Contracting State whose capital is wholly or partly detained or controlled, directly or indirectly, by one or more residents of the other Contracting State, are not subject in the former State to any tax or obligation relating thereto which is not or is more burdensome than those to which other similar undertakings of the former State are or may be subject.

5. Under the agreement between the competent authorities of the Contracting States, the contributions paid by a natural person who is resident of a Contracting State to a retirement institution recognised for tax purposes in the other Contracting State, in which that person has previously been resident, shall be treated fiscally in the first State in the same manner as the contributions paid to a retirement institution recognised for tax purposes in that first State.

6. The tax exemptions and other advantages provided for by the tax legislation of a Contracting State, for the benefit of that State of its territorial entities, which engage in an activity other than industrial or commercial activity, apply, respectively, under the same conditions to the other Contracting State or its territorial entities engaged in an equal or similar activity. Notwithstanding the provisions of paragraph 7, the provisions of this paragraph do not apply to taxes due in return for services rendered.

7. Notwithstanding the provisions of Article 2, the provisions of this Article apply to all taxes, whatever their nature or name.

1. Where a person considers that the measures taken by one or both Contracting States involve or may entail for him an imposition which is not in conformity with the provisions of this Convention, irrespective of the remedies provided for by the domestic law of those States, he may submit his case to the competent authority of the Contracting State of which he is resident or, if Article 25 (1) applies, to that of the Contracting State of which he is a national. The case shall be brought within three years of the first notification of the measure involving an imposition not in accordance with the provisions of the Convention.

2. The competent authority shall, if it considers the complaint well founded and if it is not in a position to adopt a satisfactory solution, make every effort to resolve the matter through an amicable agreement with the competent authority of the other Contracting State in order to avoid an imposition which does not comply with this Convention. The agreement applies irrespective of the time limits provided for by the domestic law of the Contracting States.

3. The competent authorities of the Contracting States shall endeavour to resolve difficulties or to dispel doubts arising from the interpretation or application of the Convention by means of an amicable agreement. They may also agree to try to avoid double taxation in cases not covered by the Convention.

4. The competent authorities of the Contracting States may communicate directly with each other in order to reach an agreement as referred to in the preceding paragraphs. Where it is considered that this agreement can be facilitated by personal contacts, the exchange of views may take place within a Commission composed of representatives of the competent authorities of the Contracting States.

1. The competent authorities of the Contracting States shall exchange the information necessary to implement the provisions of this Convention, or of the domestic law of the Contracting States, relating to taxes covered by the Convention, to the extent that the taxation required by that Convention is not contrary to the Convention. The exchange of information is not limited by Article 1. Information received by a Contracting State shall be kept secret in the same way as information obtained under the domestic law of that State and shall be communicated only to the persons or authorities (including the courts and administrative bodies) responsible for the management or collection of taxes covered by the Convention, the declaratory or executive procedures relating to such taxes or the resolution of appeals relating to such taxes. These persons or authorities shall use these reports only for these purposes. They may disclose such information in public hearings of the Tribunals or in court judgements.

2. In no case may the provisions of paragraph 1 be interpreted as obliging a Contracting State to:

(a) Take administrative measures contrary to its legislation or those of the other Contracting State.

(b) Provide information that cannot be obtained on the basis of its own legislation or that of the other Contracting State; and

(c) Provide information revealing a commercial, industrial or professional secret or a commercial procedure or information whose communication is contrary to public policy.

3. The exchange of information shall take place on its own initiative or at the request of a particular case. The competent authorities of the two Contracting States shall agree to determine the list of data, which shall be provided on their own initiative.

1. The Contracting States shall afford each other assistance and assistance in collecting the taxes provided for in this Convention, as well as surcharges, compensation for delay, interest, expenses and non-criminal fines relating to such taxes.

2. At the request of the requesting Contracting State, the requested Contracting State shall collect the tax debts of the first State, in accordance with the law and administrative practice applicable to the collection of its own tax debts, unless otherwise provided for in the Convention.

3. The provisions of paragraph 2 shall apply only to tax debts which have the title enabling them to carry out recovery in the requesting State and which, unless otherwise agreed by the competent authorities, have not been appealed or are no longer subject to appeal.

4. The requested State shall not be obliged to process the request of the requesting State if it has not exhausted in its own territory the means that it can reasonably implement to collect its tax debt.

5. The application for administrative assistance shall be accompanied by:

(a) a certificate specifying the nature of the tax debt, and as regards the recovery of the conditions laid down in paragraphs 3 and 4;

(b) An official copy of the title permitting enforcement in the requesting State; and

(c) Any other document required for collection or to take precautionary measures.

6. The title permitting enforcement in the requesting State shall, where appropriate and in accordance with the provisions in force in the requested State, be admitted, approved, completed or replaced within the shortest possible time following the date of receipt of the request for assistance, by a title permitting enforcement in the requested State.

7. Questions relating to the limitation period for the tax debt are governed exclusively by the law of the requesting State. The request for assistance shall contain information about this deadline.

8. The collection proceedings carried out by the requested State as a result of a request for assistance and which, under the law of that State, may have the purpose of suspending or interrupting the limitation period, have the same effect with respect to the law of the requesting State. The requested State shall inform the requesting State of the proceedings thus carried out.

9. Tax debts for which assistance is granted shall not enjoy in the requested State any privileges that are specifically linked to the tax debts of that State, even if the procedure used for collection is that applied to its own tax debts.

10. Article 27(1) shall also apply to any information communicated to the competent authority of a Contracting State pursuant to this Article.

11. With regard to the tax debts of a Contracting State which are subject to appeal or are still subject to appeal, the competent authority of that State may, in order to safeguard its rights, request the competent authority of the other Contracting State to take the precautionary measures provided for in the law of that other State.

12. The competent authorities of the Contracting States shall agree on arrangements for the transfer of the quantities collected by the requested State on behalf of the requesting State.

13. If its legislation or administrative practice permits it in similar circumstances, the requested State may permit a deferred payment or a split payment, but shall first inform the requesting State.

1. The provisions of this Convention do not affect the tax privileges enjoyed by members of diplomatic missions, consular posts or permanent delegations to international organizations, in accordance with general principles of international law or under special agreements.

2. Notwithstanding Article 4, any natural person who is a member of a diplomatic mission, or of a consular post or permanent delegation of a Contracting State, located in the other Contracting State or in a third State, is, for the purposes of this Convention, considered to be a resident of the sending State, provided that he is subject to the same obligations, in respect of taxes on all his income or property, as residents of that State.

3. The Convention does not apply to international organizations, their organs or officials, or persons who are members of a diplomatic mission, consular post or permanent delegation of a third State, where they are located in the territory of a Contracting State and are not subject in one or other Contracting State to the same obligations, in respect of taxes on all income or property, as residents of those States.

1. The competent authorities of the Contracting States shall, to the extent necessary, regulate the modalities of application of this Convention, in particular as regards the requirements to be met in order to benefit from the provisions of the Convention.

2. In order to obtain in one Contracting State the tax reductions or exemptions and other advantages provided for by this Convention, residents of the other Contracting State must, unless otherwise provided by the competent authorities, provide a residence certificate, indicating in particular the nature and amount or value of the income or property concerned, including the certificate of the tax services of that other State.

1. This Convention may apply, in its present form or with the necessary amendments, to the overseas territories and other territorial entities of the French Republic, which receive taxes of a similar nature to those to which the Convention applies. Such extension shall take effect from the date, and with the modifications and conditions, including those relating to the cessation of its application, to be determined by mutual agreement between the Contracting States by exchange of diplomatic notes or by any other procedure in accordance with their constitutional requirements.

2. Unless the two Contracting States agree otherwise, the denunciation of the Convention by one of them pursuant to Article 33 shall terminate the application of the Convention, under the conditions provided for in this Article, in any territory or territorial entity to which it has been extended, in accordance with this Article.

1. Each Contracting State shall notify the other of its compliance with the procedures required for the entry into force of this Convention. The Convention shall enter into force on the first day of the second month following the day of receipt of the last such notification.

2. The provisions of this Convention shall apply for the first time:

(a) In respect of taxes on withholding tax, income that may be required to be paid after the entry into force of this Agreement.

(b) For the remaining income taxes, income for the calendar year following the entry into force of this Agreement or for the fiscal year beginning in the same year.

(c) In respect of the other taxes, taxes the taxable act of which occurs from 1 January of the year following the entry into force of this Convention.

3. The provisions of the Convention between the French Republic and the Spanish State, signed at Madrid on 27 June 1973, in order to avoid double taxation of income and property taxes, shall cease to have effect when the corresponding provisions of this Convention become effective. The provisions, with the exception of articles 8 to 28, of the Convention signed at Madrid on 8 January 1963 between France and Spain, aimed at avoiding double taxation and establishing rules for mutual administrative assistance in the field of income taxes and inheritance, shall remain in force.

1. This Convention shall remain in force without limitation of time. However, any Contracting State may denounce the Convention by notifying it by diplomatic means at least six months before the end of each calendar year from the fifth calendar year following its entry into force.

2. In this case, the provisions of the Convention shall apply for the last time:

(a) With regard to taxes on withholding tax, income which may be required to be paid until 31 December of the calendar year to which the notification of the complaint relates;

(b) In respect of the other income taxes, income for the calendar year to which the notification of the complaint relates or the tax year closed in the course of the same year.

(c) In respect of the remaining taxes, taxes the taxable act of which occurs during the calendar year to which the notification of the complaint relates.

In faith, the signatories, duly authorized to do so, have signed this Convention.

Done at Madrid on 10 October 1995, in duplicate, in the French and Spanish languages, attesting to the two texts.

[heading] PROTOCOL

At the time of signing the Convention between the Kingdom of Spain and the French Republic on the prevention of double taxation and the prevention of tax evasion and fraud in the area of income and property taxes, the signatories have agreed on the following provisions which form an integral part of the Convention:

1. With regard to Article 2(3)(b), the wage tax is governed by the provisions of the Convention relating to business profits or income from independent work, as appropriate.

2. With regard to Article 3(2), the meaning given to a term or an expression by tax law to the application of the Convention shall be understood to take precedence over the meaning given to that term or to that term by the other branches of law.

3. With regard to Article 4(1), the expression ‘resident of a Contracting State’ shall mean:

(a) This State, its territorial entities and legal persons governed by public law;

(b) In the case of France, companies of persons and other groups of persons subject under French domestic law to a tax regime similar to that of companies of persons, which are based in France and are not subject to corporation tax there, and where each member is personally subject to tax in France in the proportion of the profits accruing to him under French domestic law.

4. The competent authorities of the Contracting States shall agree to agree on the conditions under which the 12-month period laid down in Article 5(3) applies in the case of associated undertakings which, pursuant to Article 9(1) engage in activities which are essentially the same and which are not carried out simultaneously.

5. The provisions of Article 6 apply to income from the rental of furnished real estate.

6. With regard to Article 7(1) and (2):

(a) Where an undertaking of one Contracting State sells goods or carries out an activity in the other Contracting State through a permanent establishment situated there, the profits of that permanent establishment are not calculated on the basis of the total amount received by the undertaking, but on the basis of remuneration attributable to the actual activity of the establishment for such sales or activity.

(b) In the case of contracts, in particular contracts for the study, supply, installation or construction of equipment or industrial, commercial, scientific or public works establishments, where the undertaking has a permanent establishment, the profits of this permanent establishment shall not be determined on the basis of the total amount of the contract, but only on the basis of the part of the contract actually performed by this permanent establishment. The profits relating to the part of the contract performed in the Contracting State where the effective head office is located can only be taxed in that State.

7. With regard to Article 8, an undertaking whose effective head office is located in Spain and which operates ships or aircraft in international traffic is exempt from the professional fee in France on account of this operation. Similarly, it is understood that an undertaking whose effective head office is located in France and which operates ships or aircraft in international traffic is exempt in Spain from the Economic Activities Tax on account of this operation.

8. With regard to Article 10(4), the term ‘dividends’ is understood to mean:

(a) It includes the social liquidation share of companies subject to corporation tax;

(b) Does not cover the income referred to in Article 16(1).

9. With regard to articles 10 and 11:

(a) An institution for collective investment in transferable securities, constituted in a Contracting State where it is not subject to the tax referred to in Article 2 (3) (a) (i) or (ii), or (i) or (ii), and which receives dividends or interest the source of which is in the other Contracting State, may benefit from tax deductions or exemptions or other advantages provided for by this Convention in accordance with the arrangements agreed upon by agreement between the competent authorities of the Contracting States;

(b) By way of derogation from Article 10(3), the payment by the French Treasury referred to in that paragraph, to which a resident of Spain who is an institution for collective investment in transferable securities is entitled, is limited to the fraction of the dividends received corresponding to the rights held in that institution by residents of Spain and which may be taxed at the head of those residents.

10. By way of derogation from Article 12(2), fees paid for the use or use of containers, ships or bareboats operated in international traffic may be taxed only in the Contracting State in which the beneficial owner is a resident.

11. The term ‘related persons’, used in Articles 13(2)(a) and 23(2), applies to natural persons and designates the spouse of the taxpayer, his ascendants and their descendants.

12. By way of derogation from Article 15(1) and (2), as long as no new provisions are agreed between the Contracting States, paragraph 4 of the Convention of 27 June 1973 between Spain and France on the avoidance of double taxation of income and property taxes, the text of which is as follows, shall remain in force:

‘4. Border workers who justify this quality by means of the border document established by particular agreement between the Contracting States are subject to taxation, by the salaries, salaries and other remuneration they receive for this purpose, only in the Contracting State of which they are residents.’

The competent authorities of the Contracting States shall, where necessary, determine the manner in which the preceding provisions shall be applied and shall agree in particular, if necessary, on the documentary document as a border letter for the purposes of these provisions.

13. The provisions of Article 16(1) shall apply to income, excluding dividends, which a natural person who is a resident of Spain receives as a member or administrator of a company other than a public limited company, which is resident in France and subject to corporation tax there.

14. With regard to article 24, it is understood that:

(a) For the purposes of paragraph 1, the expression ‘amount of French tax on such income’ means:

(i) Where a proportional tax rate is applied to determine the tax due on such income, the result of multiplying the amount of net income considered by the tax rate actually applied to them;

(ii) Where a progressive rate is applied to determine the tax due on such income, the result of multiplying the amount of net income considered by the rate resulting from dividing the tax actually due for the total net income taxable under French law and the amount of that total net income.

This interpretation applies by analogy to the term ‘amount of the French tax on this property’.

(b) For the income referred to in paragraph 1(a)(ii), the term ‘amount of tax paid in Spain’ means the amount of Spanish tax actually incurred on a definitive basis on account of these income, as provided for in this Agreement, by the resident of France who is the beneficiary of these income;

(c) For the income referred to in paragraph 2(a) and (b), the words 'amount equal to the tax paid in France' and 'tax actually paid by the first company' refer to the amount of the French tax actually paid on a definitive basis on account of these income, in accordance with the provisions of this Agreement, by the resident of Spain who is the beneficiary of these income.

15. With regard to Article 25 (1), it is understood that natural persons possessing the nationality of a Contracting State are not in the same situation as natural persons possessing the nationality of the other Contracting State if they are not residents of the same State.

16. The provisions of this Convention do not prevent:

(a) To France, to apply the provisions of Articles 209(B) and 212 of its General Tax Code or other similar provisions which modify or replace those of these Articles;

(b) To Spain, to apply the provisions of article 16.9 of Law 61/1978 of 27 December, or other similar provisions that modify or replace those of these articles.

It is understood that the provisions of domestic law relating to undercapitalisation, mentioned above, apply to the extent that they are in conformity with the principles of Article 9(1).

17. (a) If the law of a Contracting State authorizes the resident companies of that State to fix their profits subject to taxation on the basis of a consolidation that includes, in particular, the results of the resident subsidiaries of the other Contracting State or of permanent establishments located in that other State, the provisions of this Convention do not preclude the application of this legislation;

(b) If, under its law, a Contracting State determines the profits of the residents of that State by deducting the losses of the resident subsidiaries of the other Contracting State or of permanent establishments located in that other State, and by integrating the profits of these subsidiaries or permanent establishments up to the amount of the losses deducted, the provisions of this Convention do not preclude the application of this legislation.

18. If the provisions of this Convention are incompatible with the provisions laid down by the institutions of the European Communities, the two Contracting States may, by mutual agreement between their competent authorities, lay down by diplomatic means the modalities and conditions under which these clauses cease to apply.

In faith, the signatories have signed this Protocol.

Done at Madrid on 10 October 1995, in duplicate, in the French and Spanish languages, attesting to the two texts.

This Convention, as provided for in Article 32.1, shall enter into force on 1 July 1997, the first day of the second month following the day of receipt of the last cross-notification between the Parties by reporting compliance with the required domestic procedures.

What is made public for general knowledge.

[ignore]Madrid, June 2, 1997.–The Technical Secretary General, Julio Núñez Montesinos.