1.1. Resident or Non-Resident?

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1. 1.1.1. Residents of France
2. 1.1.2. Non-Residents of France
3. 1.1.3. Determination of Tax Status

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1.1.1. Residents of France

To be ‘fiscally resident’ in France only one of the following three conditions need apply:

• It is considered you have your main/permanent home in France;
• You carry on a professional activity in France, either self-employed or as an employee;
• Your centre of ‘economic interests’ is in France, e.g. investments, business.

Where you have a permanent home in the UK and France, then you are deemed to be resident in the country that is the centre of your economic interests.

In order to assist with the determination of resident status the general rule that is applied is that, if you spend 183 days per calender year in France, then you are deemed to be resident.

But you would also be deemed to be resident if any one of the other conditions stated above applied.

If you arrive in France with an intent to becoming resident, then you become resident when you step onto French soil.

In some cases you can actually be resident in both countries, and the terms of the double taxation treaty between your home country and France would determine the rules that applies in these cases.

In particular, as cross-border working and living within Europe becomes more commonplace, it has become something of a game of chance for the various tax authorities to interprete the circumstances of all cases in a consistent manner.

Thus, there can be uncertainty about the status of families who relocate to France, but where the breadwinner countinues to work outside of the country.

In other words, within the EU, your rights and obligations relate to where you undertake your professional activities.

This rule applies to employed and self-employed persons alike.

Even though you will pay tax in your country of employment, some local French tax offices insist that you complete a tax return. You will not be taxed twice on your income earned outside of France, but this income will be taken into consideration in calculating your liability to tax on any French earned income e.g. rental income.

If you do clearly become resident then you should visit or drop a line to the local tax office, (called Centre d’impôts) to advise them. If you do not they are likely to contact you anyway!

If you do finally relocate to France, in the year you become resident you will be taxed separately on the basis of your actual residence in each country.

The UK Customs and Excise Office have published some guidance to assist with determining the resident status of those living between the UK and elsewhere, which you can read here.

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1.1.2. Non Residents of France

If you consider you are non-resident, but you earn revenues from France (e.g. rental income), your liability to taxation is going to depend on the terms of any double taxation treaty between France and your home country.

In general, under the terms of most double taxation treaties, rental income is liable to taxation in the country where it is earned.

However, depending on the terms of any double taxation treaty between your home country and France, you may well then be entitled to partial relief or exemption against potential tax liablity in your home country.

What this means is that, if the tax you pay in France is greater than that you would pay in the UK, then no further taxation is payable in the UK.

Conversely, if you pay less in tax than you would pay in the UK, then you will get a tax credit against income tax paid in France.

In order to declare your French earnings you need to contact the Centre des impôts des Non-Résidents (CINR), 10, rue du centre, Noisy-le-Grand (93).

The e mail address of the office for non-residents is cinr.paris@dgi.finances.gouv.

You can also download the tax declaration by visiting Déclaration De Revenu (non Résident).

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1.1.3. Determination of Tax Status

If you are unsure of your tax status or the tax status of a proposed transaction, there is a process called rescrit fiscal, in which the tax authority are formally required to declare their position on your cirumstances.

The procedure grants you exoneration from later sanctions by the tax authority.

Under the procedure you would need to write to your Centre d’impôts invoking the right of rescrit fiscal, and seeking a formal declaration from them.

The use of this procedure is particulary useful if your circumstances are complex, or you are a new business and you wish to make use of a tax saving scheme and you are not sure if it applies in your case.

Conversely, you also risk attracting the interest of the tax authority on your affairs, so it is not a procedure to be used if you like your privacy!

If the tax authority do not reply within six months they are deemed granted acceptance and you are later relieved of any contrary action against you.

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Next: Your Taxable Income