Franco-German Tax Convention
The Franco-German tax convention lays down the rules applicable to natural persons and undertakings having interests in France and Germany. Its main objective is to avoid situations of double taxation and to determine the tax duties of each of the two States. This Convention forms part of an old tax cooperation between France and Germany and constitutes a reference text for cross-border situations.
Whether you are expatriates, frontier workers, entrepreneurs, investors, employees or property owners in one of the two countries, the tax treaty can have a significant impact on your tax situation.
Why is there a tax convention between France and Germany?
Economic trade between France and Germany is among the most important in Europe. Every year, many taxpayers reside, work, invest or expand on both sides of the border.
Without a tax treaty, certain income could be taxed simultaneously in both countries.
The purpose of the Franco-German tax convention is to:
- avoid situations of double taxation;
- determine in which State certain income may be taxed;
- define the criteria for tax residence when a person has links with both States;
- organise information exchange between the French and German tax administrations.
Who is affected by the Franco-German tax convention?
The convention may apply in many situations, including when you:
- are a French tax resident and collect income from Germany;
- are a German tax resident and have income from French sources;
- Consider an expatriation between France and Germany;
- engage in paid or self-employed activity in one of the two countries;
- a frontier worker;
- own real estate assets in France or Germany;
- collect dividends, interest or other international income;
- run a business in both states.
Each situation requires an individualised analysis in order to determine the rules actually applicable.
The main stakes of the tax convention France – Germany
The tax convention deals in particular with matters relating to:
- tax residence;
- preventing double taxation;
- the taxation of wages and professional incomes;
- the regime applicable to frontier workers;
- taxation of real estate income;
- dividends, interest and royalties;
- certain capital gains;
- exchange of information between tax administrations.
The application of these rules depends on many legal and tax criteria. An isolated reading of the convention does not always allow for a proper understanding of its consequences.
Why call on an international tax lawyer?
International tax treaties must be interpreted in the light of French tax law, German law and administrative comments and case law.
Édouard Pruvost's firm supports French and international clients on all issues related to Franco-German taxation, including:
- tax residence;
- expatriation and international mobility;
- taxation of frontier workers;
- international investment;
- Foreign income;
- international tax control;
- heritage and entrepreneurial structure;
- prevention and resolution of double taxation situations.
Each case is subject to a personalized study in order to secure your tax situation and limit the risk of recovery.
Consult the official tax convention
The official text of the tax convention between France and Germany is available on the website of the French tax administration.
You can consult the official convention by clicking on the following link:
Be accompanied by a tax lawyer
The tax treaty establishes a general framework, but its application always depends on the circumstances of each taxpayer. The tax residence, the source of income, the location of the assets and the nature of the activities carried out must be assessed as a whole in order to determine precisely the applicable rules.
Edward Pruvost's firm supports individuals, managers and companies facing Franco-German tax issues. We will assist you in the analysis of your situation, the application of the tax treaty and the securing of your international transactions.
