French tax residency—when you need to pay tax in France

Your residence status will affect where you are liable to pay tax on your worldwide income and wealth.

According to Article 4A of the French General Tax Code, individuals domiciled in France are subject to income tax on all their worldwide income, whereas those who are not domiciled in France, are only taxable on their income from French sources. Note that any French-source income is always liable to taxation, regardless of residency.

Working out your residence status

Whether you have French citizenship or not, you are deemed to be a French tax resident if you meet at least one of the following criteria:

• You consider France as your main home, and if your spouse and any dependent children are living in France full-time.
• You are physically present in France for 183 days or more in a tax year. However, say for instance you reside in three or more countries, and that the country where you spend the most time, is France (even for less than 183 days) then you would be considered a tax resident. 
• Your main occupation is in France / main source of income is generated in France.
  If you carry out your main professional activities in France, whether you are a salaried employee or if your main business is located in France.
• Your most substantial assets are based in France. If France is the centre of your economic interests, where your largest investments are located.

Once you have identified yourself as a tax resident in France, you are responsible for informing the French tax authorities and for filing the relevant tax returns to declare your income.

SPLIT-YEAR APPROACH – Arriving and Departing France

You are only liable to pay French tax on the income earned once you arrive in France. You would not be required to pay tax on any worldwide income earned prior to your arrival date in France.

When you leave France, you will become non-resident from the day after your departure and you should inform the Tax Office of this date. However, if you own property in France, you are still liable for property tax and housing tax. If you rent out your property when you leave France, housing tax would still be payable as long as the property is in your name on the 1st of January of the year of departure.

Annual income tax returns – Déclaration des revenues

The French tax year follows the calendar year from January 1st – December 31st, and an annual income tax return would need to be filed by May of the following year.

If it is your first time to submit a French income tax return, you will need to submit a paper return manually and post it to the French tax office, as you would not have an online account on impots.gouv.fr yet.

From FY 2019, there is no longer a requirement to file a return for employees in France due to the deduction at source by the employer, the tax authorities will send you a notification if you are exempt and you can also check your online account. This also applies to those who are only in receipt of a French pension.

Here at France Accountants, we assist many clients with their French resident and non-resident annual income tax returns, both online and manually by post. If you are unsure of whether or not you would be considered a French tax resident, feel free to contact us outlining your situation and we will be happy to help.