Must VLS-TS visa holders become French residents?

Reader Question: We are Americans who have a VLS-TS visa that we want to renew. We want to simply renew it and keep our US tax residency, although we purchased a house in France to live in. Is it obligatory that we apply for residency? If so, does that make us tax residents in France?

The first thing to note is holders of a VLS-TS visa must validate it within three months of moving to France, although preferably this is carried out as soon as possible. Presumably, you did so.

This mandatory validation of the visa means that effectively your visa becomes treated as equivalent to a residency card moving forward.

Before 12 months of residency in France are up, if you want to prolong your stay the only option is to apply at your local prefecture for a physical residency permit. 

Assuming that you came on a visiteur basis (that is, that you have self-sufficient means and healthcare cover and do not work), the card would be for the same kind of stay. 

After five years in France renewing such a permit annually it is possible to apply for a 10-year carte de résident. 

An alternative for those who do not want to move to France on a settled basis is to obtain a six month VLS-T visa, which does not require you to ‘validate’ it and is not considered equivalent to a residency permit, however, this limits how long you can stay and it cannot be renewed.

Tax residency anxieties

You say you are worried about whether it will change your tax residency, as you wish to remain a tax resident of the US. 

Note that currently, most US citizens overseas still need to declare their income annually to the US (although there has been a push to update legislation in this area). 

The right to remain in France (droit de séjour), as conferred by a visa and/or residency card is not identical to tax residency.. 

The country where you are considered to be a ‘tax resident’ takes into account several factors, including where you spend most of your time in a given tax year (in France this is the same as the calendar year) and where you have your strongest attachments and the centre of your money affairs. 

That being said, in most cases where someone qualifies for a French residency card, their tax residency will also be here.

As a resident you would need to declare your income to French authorities each spring, including worldwide income. 

Depending on the source of this income however, tax treaties between the US and France may limit or exempt certain incomes from tax levied by France or the US.

This can depend on several factors, and discussing the matter with a tax expert is advised.