Tax planning before you move to Europe: why the date matters
Why Americans moving to Spain, Portugal or France should plan before their residence abroad starts, when that date falls in each country, and what a course adds that a checklist can't.
Updated · Expat Academy · Education, not advice
When you become a tax resident of Spain, Portugal or France, your new country starts taxing your worldwide income, and the US keeps taxing you as a citizen. Before that date, only the US taxes you. That gap is where some of the most valuable planning in a move abroad happens, and it closes on a date that differs by country.
The deadline in each country
| Country | When residence starts | Your planning deadline |
|---|---|---|
| France | When you move your home there | Your arrival date |
| Portugal | The first day you meet a test (a split year) | Your arrival date |
| Spain | 1 January of a year in which you meet a test (no split year) | 1 January of your first Spanish year |
Spain is the one people get wrong: arriving in early summer can make the whole year Spanish, including income you received in the US months before you landed. See Spain's tax residency rules, Portugal's and France's.
Why it matters so much
Three things make the months before a move unusually important:
- Each kind of account is treated differently. Pre-tax accounts, Roth accounts, HSAs and taxable brokerage accounts can each be taxed in a different way abroad, and the treaty with each country draws the lines differently.
- What helps in one country can hurt in another. A step that cuts your tax every year in France can raise it in Spain or Portugal. Advice written for one country, or for Americans in general, can point you the wrong way.
- Some choices can't be undone. Once your residence starts, the window for the US-only version of a decision has closed for good.
The amounts can be large: for the households in our course examples, the right steps before the move are worth thousands of dollars a year for as long as they live abroad.
What people commonly get wrong
- Assuming the US rules still guide them. The best order to draw from your accounts at home is often not the best order abroad.
- Treating the move date as a formality. It's a tax date, and in Spain it may not be the day you think.
- Leaving it to the first meeting with an adviser abroad, after the window has closed.
What the courses add
Each full course for moving abroad (Track B) has a lesson on your accounts in that country and the steps to take while only the US taxes you, worked through for a real-looking household; an account comparison calculator that shows what each step is worth for your own accounts, before and after the move; a year-of-move planner for the US tax years you have left; and a pre-move checklist that puts everything in order with its deadline. You arrive at your CPA's office with the numbers and the right questions. See the courses for Spain, Portugal and France.
Questions
Is there tax planning to do before moving to Europe?
For most American retirees, yes. Until your residence abroad starts, only the US taxes you. Some decisions about your accounts are cheaper, or only possible, before that date.
When does my residence start in Spain, Portugal or France?
In France and Portugal, generally on the day you move there to live. Spain works by calendar year: if you meet a test in a year, you're resident for all of it, so your first Spanish year starts on 1 January.
Are the same moves right in every country?
No. Each country taxes retirement accounts, Roth accounts, HSAs and investment income differently, and a move that saves tax in one can cost money in another.
Do I still need an adviser?
Yes. Planning is personal and the rules change. Understanding the choices first makes your time with a cross-border adviser shorter and better.
Sources
- US-France income tax convention (1994), irs.gov
- Convenio España-Estados Unidos (BOE-A-1990-30940)
- US-Portugal income tax convention (1994), irs.gov
Education, not advice. This guide explains general rules as of the date above. Rules change every year; confirm your own situation with a qualified adviser in the US and in France.