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How to determine your tax domicile?

How to determine your tax domicile?

by | Dec 23, 2022 | Non classifié(e) | 0 comments

To be subject to income tax in France, individuals must have their tax residence in France.  

The notion of tax domicile is independent of civil domicile and nationality. Thus, a French person can be considered as not domiciled in France while a foreigner is.   

The tax domicile 

The following are considered as having their tax domicile in France:

  • Persons who have their home or principal place of residence in France;

  • Those who carry out a professional activity in France, whether salaried or not, unless they can prove that this activity is carried out on a secondary basis;

  • Those who have in France the center of their economic interests.

For the application of the provisions of articles 4 A and 4 B of the CGI relating to the determination of the tax domicile, the home of an unmarried taxpayer means the place where he normally lives and has the center of his personal life, without taking into account stays made temporarily elsewhere because of the needs of the profession or exceptional circumstances.

The place of the main residence can only determine the tax residence if the taxpayer does not have a home in France.

In the presence of an international treaty, the criteria of Article 4B are not intended to apply if an examination of the two legislations leads to the same taxpayer being recognized as resident in both States. In this case, the treaty criteria of tax residence must be applied.

The example of tax territoriality

For example, the Franco-Belgian tax treaty of March 10, 1964, deems a taxpayer to be a resident of the contracting state if he has a home in both countries and has his center of vital interests there. This is defined as the place where the taxpayer’s closest personal and professional ties are located.

Thus, a taxpayer who receives income from a Belgian holding company corresponding to the economic activity of consulting that he performs within French companies maintains closer economic ties with France even if he receives neither income nor dividends from these companies (CE, September 26, 2012, M et Mme Tedesco).

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If you think you are subject to double taxation or have a question concerning the establishment of your tax domicile contact AlterTax Avocats. Your tax advisor in Paris for individuals and companies.  

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