Determination of the tax domicile is essential for the taxation of income. It is based on a number of criteria that should not be overlooked.
How to determine your tax domicile
The tax authorities consider as domiciled in France for tax purposes those who meet one of these three criteria:
– have their home or their principal place of residence in France;
– exercise a professional activity in France which is salaried or otherwise;
– have the centre of their financial interests in France.
- the home refers to the place where the family resides (spouse, children) although one of its members regularly works abroad. The “principal place of residence” criterion is met when the expatriate stays there for more than 183 days a year.
- The “centre of financial interests” criterion applies to the place where the taxpayer makes their principal investments, has sited the registered office of their business, or receives most of their income.
How to determine tax status
- In order to determine resident or non-resident tax status, it is firstly necessary to determine whether there is an international tax treaty between France and the country in which the person works or is settled more or less regularly. These international tax treaties, which apply in more than a hundred countries, prevail over domestic legislation. The simplest solution is therefore to question the tax authorities on this point.
- Expatriates who continue to receive income from French sources are only taxable for this income vis-à-vis the tax office for non-residents. It may include income from property located in France, salaries paid as a result of business carried on in France, public remuneration paid by the French state or income from securities.
The French tax authorities have access to all administrative data: the national bank account file, rent receipts, enrolments in schools, and so can locate the true place of residence of the taxpayer.
Article 4 B of the French General Tax Code