Tax residency depends on internal regulations or reciprocal agreements and treaties.
Legal or conventional criteria determine tax residence. Your tax residence will be considered in France if you fulfill one of the conditions below, regardless of your nationality:
- Your permanent place of residence is in France, i.e. your habitual place of residence or that of your family (spouse and children).
- If you have dual permanent residence, the center of your financial and personal interests is in France.
- If your center of interests cannot be determined, your primary place of residence is in France (residence in France for more than 183 days in the same year).
- In the absence of any other deciding criteria among the above (primary place of residence or no place of residence in either country), your tax residence will be in France if you hold French nationality.
- Failing this, the tax authorities of both countries may be seized to determine your tax residence.
Persons having their tax residence in France are taxable on all their income from French and foreign sources. People who are not tax resident in France will only be taxed on their French source income.
International tax treaties may also provide for specific arrangements.
Tax regime for expatriates
A special expatriate exemption scheme exists to help attract company directors and employees to France by providing partial income tax exemption, subject to certain conditions and for a period of up to eight years.
Eligible employees and company directors of any nationality called upon to work full-time in a permanent or temporary position for a company established in France can benefit from this specific tax regime.
To be eligible, beneficiaries must fulfill two conditions:
- Not having been domiciled in France during the 5 calendar years preceding the taking of office
- Be a tax resident in France for the year in question.
Declaring your taxes
The tax return summarizes the income received by a taxpayer resident in France during the previous year and allows the French tax authorities to calculate the amount of tax to be paid. It also mentions the family situation and any dependents of the taxpayer.
The declaration must be carried out each year between mid-April and end-May / beginning of June in case of declaration by Internet and according to the department of residence.
Once the declaration has been completed, an income tax notice stating the total amount to be paid is sent to the taxpayer by the tax authorities when it is taxable. This notice is sent to the taxpayer during the second half of the year.
The declaration is made by tax household. A statement will be sufficient for all members of a family:
- The taxpayer or the spouses (married or pacsés). Spouses or partners of PACS may also decide to make a separate declaration of their income
- People who have just arrived in France must complete their declaration on paper in the first year. The procedure can be carried out by internet from the second year on the site www.impots.gouv.fr.
- The tax return form, which must be dated and signed by the taxpayer, is called Cerfa no. 2042. It evolves every year according to the law of finances. As an appendix to this declaration, certain types of income are reported on forms (property income, capital gains, income received abroad, etc.).