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TAXES

EXPLAINED: The rules on tax residency in France

It's not uncommon for people who move countries to have assets and income in more than one place - so what does this mean for your tax residency status in France? Here's what the rules say.

EXPLAINED: The rules on tax residency in France
Photo by Philippe HUGUEN / AFP

Whether it’s a pension paid by a home country or rental income and earnings in more than one country, it’s common for people to have assets in both France and their original country.

Residency

The first thing to mention is the key point that ‘tax residency’ and residency for immigration purposes are not the same thing.

Tax residency can be an automatic status based on simply being in a country for a certain period of time.

Residency for immigration purposes is different and is not automatically granted – if you are not an EU citizen (ie you’re British, American, Canadian etc) then you will need either a visa or a carte de séjour residency card in order to be legally resident in France. 

If you have an EU passport you don’t need a visa or residency card, your EU passport is proof that you have the right to residency in France, although there are other obligations to fulfil.

The situation for second-home owners is different – you are not counted as a French resident if you simply visit regularly (below the threshold for tax residency, see below). As a second-home owner you will be required to pay property taxes, but this does not give you residency rights, nor does it necessarily mean that you are a tax resident.

Tax declaration

The other thing that frequently catches out foreigners is the annual French tax declaration. 

If you are resident in France in immigration terms – ie you have a residency visa or carte de séjour or are an EU citizen whose main home is France – then you must complete the annual déclaration des revenus (tax declaration).

This is the case even if all your assets come from outside France (eg a pension paid in your home country) and is also the case for almost all salaried employees who have their taxes deducted at source.

You must tell the French tax man about all your assets – both in France and abroad – however you may not have to pay tax on them in France. 

Find full details of the declaration HERE.

Non-resident tax declaration

You may also have to complete a tax declaration in France if you do not live here but do have income here. Non-residents use a different declaration form to that completed by residents – full details here.

Tax resident

So where are you tax resident?

The French government considers you a tax resident if you either;

  • Live in France 
  • Work in France
  • Have the centre of your economic interests in France

Living in France – the government’s definition of living in France is that France is your ‘main place of residence’ and it defines this as ‘you stay there more than six months of the year’ – so second-home owners should bear this in mind when planning how long to stay in France. 

It’s also important to note that the six-month visitor visa temporaire is for visitors, but if you get the year-long visitor visa, the French government considers you a resident – more on that here.

If you are a couple and one of you is tax resident in France and the other tax resident in another country, you may still to declare your partner’s French income and income of any dependants in France – full details on couples with mixed residency here

Working in France – if you live outside France but work here, you will only be considered a tax resident if the work you do in France is your ‘main activity’. Main activity is defined as either the work activity you devote the most time to, or the one that provides the majority of your income.

So if you live outside France and either come here to work for a few weeks out of the year, or take on odd pieces of work on a remote basis, then you are a not a French tax resident. If, however, you live outside France but the majority of your work is done in France – for example you work online for a company in France  – then you are a tax resident.

This probably won’t apply to many people, but if you happen to be the director of a company whose head office is in France and which has an annual turnover of more than €250 million, then you are a French tax resident.

Centre of economic activity in France – this is the category that has the most vague definition, although people who are covered by this will probably have their own financial advisers.

It concerns people who don’t live or work in France, but have their ‘main investments’ in France or the business from which they administer their main investments is based in France.

Other tax declarations

It’s not uncommon for foreigners in France to have to complete two declarations every year – one for France and one for their home country.

The IRS is notoriously reluctant to let US citizens out of its clutches, so most Americans in France still have to complete an annual return for the IRS, even if they have no income in the USA.

Other countries have different rules, but if you have any economic activity in your home country – eg income from a property that you rent out, investment income or a pension – it’s likely that you will need to complete a declaration in your home country as well.

Most countries have dual taxation agreements with France, so although you will end up declaring the same income twice – once to the French tax man and one to your home country’s tax authorities – you will only pay tax on it once. 

Cross-border workers

There is a special status – known as a frontalier – for people who live in areas close to the border and work in one country but live in another, for example people who live in eastern France and work over the border in Switzerland.

The general rule for frontaliers is that you pay tax in the country you live in, not the country you work in, but there are some exceptions, so you should seek advice to ensure that you are compliant with rules specific to cross-border workers.

This article is intended as general advice only, if you are in doubt about your French tax status you should consult an expert – how to find professional tax help in France. You can also find more information on the French tax system in our tax section HERE.

Member comments

  1. Great article that simplifies this complicated area a lot. It’s still not 100% clear though and I’ve been trying to work through this for months. If I have my family residence in the UK, my kids are in the UK, I spend more time in the UK then I’m not considered as “living in France”. My wife is in France and spends most of her time here and has a business here, but the rules around that for me at least, seem understandable.
    But, if I work for a UK company and spend time in France working remotely for them, am I “working in France”? To use the terminology from the article “if the majority of your work is done in France, then you are tax resident”. But by definition, if I spend the majority of my time in the UK, then the majority of my work (over the course of a tax year) is done in the UK. Am I thinking about this in the right way?

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For members

TRAVEL NEWS

France to use iPads to check biometic data of travellers from UK

France has revealed its plans for new border checks of passengers arriving from the UK next year - including using iPads to take biometric data like fingerprints.

France to use iPads to check biometic data of travellers from UK

France plans to use tablet computer devices to register non-EU car passengers at land and sea borders – including its border with the UK – when the new EU border system EES becomes operational next year, a new document has revealed. 

In May 2023, countries of the Schengen area will introduce the new Entry & Exit System (EES) to record the entry and exit of non-EU citizens at their external borders. The EES was created to tighten up border security and will ensure the enforcement of the 90-day short-stay limit for tourists and visitors. 

You can read full details of how the system will work HERE.

The system will enable the automatic scanning of passports replacing manual stamping by border guards. Data collected will include the person’s name, type of travel document, fingerprints and facial images, as well as the date and place of entry and exit. The information will be kept in a centralised database on a rolling three-year basis that will be re-set at each entry.

The system will come into effect around the EU, but there have been major concerns about the France-UK border due to both the high volume of traffic and the Le Touquet Treaty border arrangements that mean French officials work in British ports of Dover and Folkestone – both of which saw long queues this summer as travel resumed after the pandemic. 

A document shared recently by the secretariat of the EU Council (the EU institution representing member states) and published by Statewatch, a non-profit organisation that monitors civil liberties, shows how countries are preparing. 

In the responses to the EU questionnaire, French authorities vowed they would be ready, saying simply Oui, La France sera prête (yes, France will be ready).

“The French authorities have carried out numerous studies and analyses, in cooperation with infrastructure managers, to map passenger flows at each border crossing post… and evaluate the EES impact on waiting times,” the document says. 

“France has prepared very actively and will be on schedule for an EES implementation in compliance with the EU regulation,” French authorities say.

Test runs of the new system will begin at French border posts at the end of this year, they added.

However despite the vow that the new system will be ready on time to deal with thousands  of passengers each day authorities admitted “the prospect of the impact of EES on waiting times at the borders worries infrastructure managers.”

French authorities admitted they are concerned about queues and backlogs at border crossings.

“The fact remains that fluidity remains a concern, and that exchanges are continue with each border post manager to make progress on this point,” they told the EU.

This same concern was expressed by the CEO of the Port of Dover, Doug Bannister earlier this month when he told The Local he was concerned the time it takes to check each vehicle under EES could jump for around one and half minutes currently to 10 minutes.

Tablets to be used at land and sea borders

The way checks would be carried out for passengers at France’s sea borders with the UK has been a major concern especially at the Dover-Calais crossing, the busiest car route between the UK and continental Europe, with 8.6 million passengers passing through in 2019. 

Bannister, told The Local that first-time registration at Dover was the most concerning part of the new process, as it would require taking four fingerprints and facial images “at the border in front of an immigration officer”. 

Bannister said the current process was “designed around an airport” but this would not suit “a busy ferry terminal”. He demanded a system be introduced whereby registrations are carried out without passengers needing to leave the car.

French authorities’ response to the EU questionnaire has revealed they plan to use tablets, such as iPads to register car passengers’ details under EES.

The responses by French authorities to the EU questionnaire seem to clarify that agents will use tablets to register passengers directly in their cars under the “close supervision” of border guards, who will validate the biometric data on the spot. 

France will set up “‘mobile’ registration solutions (tablets) to record the biographical and biometric data of travellers eligible for the EES directly on board vehicles,” the document revealed.

People getting off buses will instead be able to use self-service kiosks similar to those set up at airports.

Airports

For non-EU visitors arriving by plane, France will set up self-service kiosks “supervised remotely via video by a border guard”.

Here, third-country nationals will be able to pre-register their biometric data and personal information, and complete the entry questionnaire. They will then be directed to the booth for verification of the data with the border guard. 

According to the document, France plans to maintain the eligibility for certain third-country nationals to go through automated ‘Parafe’ checks for subsequent entries and exits. E-gates are currently available for the citizens of Andorra, Monaco, San Marino, Australia, Canada, South Korea, Japan, New Zealand the United Kingdom and Singapore (as well as EU citizens).

Doubts on gradual introduction

To facilitate the process, the European Commission has proposed a ‘progressive approach’ that would allow the creation of “incomplete” passenger files for 9 months following the EES entry into operation, and continuing passport stamping for 3 months. 

Dover had also favoured some kind of transition period to allow the port to get used to the new system. But the French appear to have rejected this idea. 

They described the option of “progressive” introduction as “not satisfactory”, because it would require other adaptations of the system. 

France has called for “flexibility” to mitigate the impact of EES in the first months of its entry into service. In particular, French authorities called for the possibility of not creating EES files for third-country nationals who entered the Schengen area before the system becomes operational, leaving this task to when they return later. 

This would “significantly ease the pressure” on border guards “during the first three months after entry into service,” the document says.

Responding to the questions, French authorities also said they intend to seek the support of Frontex, the EU border agency, in a more general context than the the entry in operation of the EES, in view of the 2024 Olympics. 

Non-EU residents in France

EES applies only to people entering the EU as tourists or making short visits – it does not apply to non-EU nationals who live in an EU country with a residency card such as a carte de séjour or a visa.

You can read full details on the system for residents HERE.

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