When are you a ‘fiscal resident of France'?

Once you have physically moved to France with the intention of making it your main home, you are fiscally (tax) resident. This does not include visits for holidays or to a second home in France. This means that you should declare all your worldwide income to France for assessment from that date, even though it might not necessarily be taxed.

Where you are fiscally resident is not a question of choice but is subject to rules and thus a matter of fact. If in doubt, several criteria are used by France, first of all, whether your main home (foyer) is in the country, not just a holiday residence. 

This should be available for your use and not rented out and you probably receive utility bills at the address in your name. Some couples have different fiscal residency. The foyer concept is broad but as a general rule it is where you ‘normally’ live and have the strongest personal, family etc ties (eg. where friends and relatives live and where you take part in leisure activities). 

If you are part of a couple, it is probably also where your spouse or partner and any dependent children also live. 

If this cannot be clearly determined, especially if you have multiple properties and your life is truly split between different countries, your lieu de séjour principal is looked at. This means the place where, in a given year, you spend the most time. 

This will often mean at least 183 days (six months) in a given tax calendar year, but it is not correct to say that someone spending less than this number of days in France could never be considered a fiscal resident.

For example, someone spending five months in France, four in Italy and three in the UK is still spending more of their time in France than in any other country and may still be deemed a French fiscal resident. Also, it is best to avoid cutting this too fine. 

Case law has clarified that the ‘foyer’ rule is the main criterion and lawyers say the other is only usually considered if there is no obvious answer to this. 

Further factors that may be taken as indicative of French tax residency are if you have ‘the centre of your economic interests’ in France or if you run a French-based business that provides more than a mere top-up income. The former would include, for example, running your financial affairs from France and having most of your savings and investments in the country or if most of your income arises here.

Concerning running a business, if you have more than one work/business interest, it will be the main one that will be significant – the one that takes up the largest amount of time and/or generates the most income.

With regard to the séjour principal test, if the tax office is in doubt over where you may have been on certain days they are liable to assume it was France, so it is preferable to allow at least a good month of difference between other places and France to be on the safe side, according to English-speaking French tax lawyer Laurent Gravelle from Sophia Antipolis in the Alpes-Maritimes.

Assuming you have become a fiscal resident, your tax declaration obligations would date from the day when the situation arose that created fiscal residency. This may be from day one in France if you have sold up in another country and made a permanent move. 

In some cases being a fiscal resident may require a combination of the criteria discussed here rather than any one alone. A taxpayer retains fiscal residency of his/her original country until such a time as he/she falls under the fiscal residency rules of the country to which he/she is moving.

In general, under international taxation laws, you can only be a fiscal resident of one country. However there are cases where someone can be a fiscal resident of one country and yet reside in another, for example an employee of one country on secondment in another country.

Also, two countries’ definitions of tax residency may not coincide exactly and there can be complex situations where two countries might each judge you to fall under their rules. 

The UK rules, for instance, range from concrete tests such as having your only ‘home’ located there or spending 183 or more days there in the UK tax year (April 6 to April 5) to vaguer notions of having ‘sufficient ties’ to the UK, which could relate to close family, accommodation you have available or work you do (see: gov.uk/tax-foreign-income/residence).

If in doubt, in this case, double tax treaties such as those signed between France and the UK and US set out ‘tie-breaker’ rules which focus on the ‘permanent home’, or otherwise where you have the most personal and economic interests, where you have your habitual abode, or finally, the country of which you are a national. 

If your case is not clear cut you may wish to keep a record and proof of days spent in France, bearing in mind that if you arrive before midnight that day is counted. You could keep items such as travel tickets and boarding cards. 

Retirees are said to be more at risk of falling foul of this than people who work in France, especially if they have overseas ‘ties’ such as property. 

In most cases fiscal residency will be clear, however if in doubt take advice from a professional who works with expatriates.