When it comes to discussions on tax residency, you might hear talk of the ‘183 day rule’ – this is the idea that spending more than half the year (365 days in a year divided by 2 = 182.5) in a country makes one a tax resident. While while this might be useful as a guide, it’s not the whole story when it comes to whether France considers you a tax resident. Unlike residency in immigration terms (which is decided by things like applying for
a visa or residency permit), tax residency is not something that you choose, it’s about whether France – or any other country – regards you as its tax resident. So how does France decide who is tax resident? In general, you can be considered a tax resident of France if any one of the following applies to you; You live in France You work in France You have the centre of your economic interests in France And it’s the ‘living in France’ bit where those
183 days become relevant. For most people, it’s pretty clear which country they live in. But those who split their time between one or more countries, or who have a jet-setting lifestyle, may need to count the number of days to figure out where they are considered resident. 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” – this does not have to
be a consecutive period, simply that in one year you spent 183 days or more there. This can, therefore, apply to second-home owners who spent more than 183 days at their French property – even if they consider themselves to be resident elsewhere and their French place to be simply a holiday home. In most cases, tax residency is done on a self-declaration basis, but French tax authorities have wide-ranging powers to investigate if they become suspicious about someone’s residency status. In a recent case,
French footballer Samir Nasri received a €5 million tax bill after tax authorities used flight details and data from his online takeout account to prove that he was not – as he claimed – a resident of Dubai but in fact spent more than half the year in France. Even if you spend less than 183 days a year in France, you could still be considered a tax resident if the majority of your work is in France, or if your “centre of economic interests”
is in France. Having a carte de séjour (residency permit) clearly indicates your intention to be resident in France, so in most cases you would be considered a tax resident, unless you can clearly demonstrate why not. It’s possible to be considered a tax resident of more than one country – if you live in another country but have the centre of your economic interests in France, for example. Every country has its own definition of who it counts as a tax resident. Americans remain
under the auspices of the IRS regardless of where they live – due to the US policy of citizenship-based taxation – but can also be considered a tax resident of France. What does being tax resident mean? If France considers you a tax resident, you will need to make an annual tax declaration in France. All residents in France are required to do this, even if they have no income in France. But it’s important to note that being tax resident doesn’t necessarily mean that
you will have to pay tax in France – in fact, if all your income comes from another country, then the double-taxation treaties mean that you probably won’t. But you still have to do the annual French declaration. Where residency might affect your tax bill is if you fall under the scope of the ‘wealth tax’, while you may also become liable for French inheritance tax. Not to be confused with . . . the 90/180 day rule Another key number for some foreigners in
France is the ’90 day rule’, sometimes known as the ’90/180 day rule’. This is an immigration one, referencing the number of visa-free days certain nationalities can spend in France – in brief, people covered by this rule can spend 90 days out of every 180 in France. This adds up to six months over the course of a year, but they cannot be six consecutive months – find the full explanation here. Not everyone is affected by the 90-day rule – citizens of EU
countries benefit from Freedom of Movement, so do not have to count their days for immigration purposes (although they are still affected by tax residency rules). Meanwhile, citizens of some countries require a visa even for short trips to France, so do not benefit from the 90-day rule – countries covered by it include the UK, US, Australia, New Zealand, Japan and Canada – find the full list here. But even for people covered by the 90-day rule, immigration residency and tax residency remain two
different things, and having one doesn’t necessarily mean you will have the other.
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