Tax residence
Art. 4 B CGI
A person is tax domiciled in France if their home or principal place of stay, main activity or economic interests are in France (art. 4 B CGI).
Please note.This definition is deliberately simplified. It does not constitute legal or tax advice. The exact conditions, thresholds, rates and periods depend on your situation and on the regulations in force.
Which text applies?
- Art. 4 A CGI : Persons domiciled in France are taxable on their worldwide income; others, on their French-source income only.
- Art. 4 B CGI : Sets the three alternative criteria of tax domicile and reserves the application of tax treaties under which the person is regarded as non-resident.
Who is a French tax resident?
These criteria are alternative: a single one is enough to establish tax domicile. French domestic law does not apply a 183-day threshold; the length of presence is only one indicator among others.
- the home or, failing that, the principal place of stay in France: the home means the place where the family habitually lives;
- carrying on a professional activity in France, whether employed or self-employed, unless it is carried on there only on an ancillary basis; executives of companies whose registered office is in France and whose annual turnover exceeds €250 million are presumed to carry on their main activity there, unless they prove otherwise;
- the centre of economic interests in France: place of the main investments, of the seat of business, or source of most of the income.
What happens in the case of dual residence?
Where two States each regard the same person as resident under their domestic law, the applicable tax treaty settles the matter through successive criteria: permanent home, centre of vital interests, habitual abode, nationality, then agreement between the tax authorities. Article 4 B draws the consequence: a person whom the treaty regards as resident of the other State is not domiciled in France.
How is the year of the change of residence taxed?
In the year of arrival or departure, the taxpayer is resident for part of the year and non-resident for the other part. The date retained determines the income taxable on a worldwide basis, the reporting obligations (accounts held abroad in particular) and, on departure, the possible application of the exit tax. It is established from dated and documented facts: the family’s move, lease, children’s schooling, taking up or leaving office.
How does the rule apply? A worked example
Fewer than 183 days in France, resident all the same
Illustrative example: an executive moves her family abroad but keeps most of her income in France. She spends 140 days a year there.
Her French-source income represents 75% of her income: the centre of her economic interests remains in France and the criterion in paragraph c of article 4 B is met, whatever the number of days. If the host State also regards her as resident, the tax treaty will settle the matter, starting with the permanent home.
- Days of presence in France
- 140
- French-source income
- €180,000
- Total income
- €240,000
- Share of French-source income
- 75%
- Centre of economic interests criterion
- met
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Area of practice
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