Are you a fiscal resident?

A FRENCH fiscal resident is defined in the French tax code as someone:

- Who has a home in France (a home, not a secondary residence), or

- Who spends most of the French tax year in France, or

- Who has his centre of economic interest in France, or,

- Who runs a business from France

With regard to the above, some clarifications may be of help:

- The first item refers to a "home". It does not refer to a "house", and so this excludes secondary residences. Unfortunately, the definition of a "home" can sometimes be a little subjective, especially when the taxpayer has two properties in two different countries which he treats as home. But in the case of someone only having one property worldwide, this property will almost certainly be considered to be his home.

- The second item, based on time, deliberately excludes the mention of a precise period of time such as a number of days. While it is literally true that "most of the year" will mean 182 or 183 days depending on the year being a leap year or not, it is incorrect to say that someone spending less than this number of days in France will never be considered a French fiscal resident.

The reason for the exclusion of a precise number of days is so the law can catch someone spending, say, five months in France, four in Hawaii and three in Australia. As
this person is spending most of their time in France compared to any other country, they will be considered a French fiscal resident.

This also follows international tax practice and fiscal evasion regulations, to ensure that all taxpayers are considered to be fiscal residents of one country, so avoiding the situation of someone paying no taxes at all.

- With regard to the third definition, the "centre of economic interest," this is loosely defined as the place from where the taxpayer’s financial affairs are managed — it is not the place from where income is generated or arises, or where investments are.

Like the term "home", this can be fairly subjective in some cases, but usual indicators of the centre of economic interest being in France include a person receiving bank statements in France or having a French will or French healthcare rights.

- The fourth heading is specifically related to the business being run from France.

Great care needs to be taken, as it is not necessarily any one of the above criteria that can, in itself, qualify someone as a fiscal resident in France.

In fact, an overview of a person’s situation might reveal that a little of each of the criteria applies and that, therefore on the whole, the person would be considered to fall under French jurisdiction.

Otherwise, always note that, in general, under international taxation laws, a taxpayer can be a fiscal resident of only one country — it is not possible to be a fiscal resident of two countries.

This said, there are specific cases where someone can be a fiscal resident of one country and yet reside in another country — for example, an employee of one country
on secondment in another country.

A taxpayer will generally retain fiscal residency of their original country until they fall under the fiscal residency rules of the country to which they are moving. If in doubt on the above, you should take professional advice.