How to determine your tax residence?

Importance of the concept of tax residence

The determination of tax residence (or even tax domicile) is a key point which largely determines the tax obligations of an individual vis-à-vis a State, whether with regards to income tax, the taxation of capital gains or even gift or inheritance tax.

Each state or territory has its own rules that define the situations in which a taxpayer must be considered a tax resident, which has very significant tax consequences.

Thus, a taxpayer domiciled in France for tax purposes is in principle taxable on all of his worldwide incomes, with some exceptions.

Similarly, French inheritance tax is in principle due on the entire estate of a person having his tax domicile in France at the time of his death.

While a non-resident of France in the tax sense is in principle taxed only on his income from French source.

And that inheritance tax is in principle due in France only on the French property of a person who dies while being domiciled abroad, even if this rule includes important exceptions, in particular when the heir is himself tax resident in France.

The combination of professional opportunities and family imperatives, or the desire to settle abroad while maintaining ties with their country of origin, leads more and more taxpayers to organize their lives between two States, or even more.

This situation raises questions about the determination of his tax residence.

French tax law rules

The “183-day rule”

Many people have the “183 day rule” in mind and conclude that their tax residence is in the state where they spend more than 6 months of the year.

This rule exists; it is important but by no means sufficient. Indeed, the determination of tax residence should not be limited to the number of days spent in a State, but it necessarily involves taking into account other criteria.

Consideration of other criteria

Thus, article 4B of the General Tax Code states that persons are considered to have their tax residence in France:

a. who have their home or place of main residence in France;

b. or who carry out a professional activity in France, whether salaried or not, unless they can justify that this activity is carried out there on an ancillary basis;

c. or who have the center of their economic interests in France.

These are alternative criteria: a person is considered to have his tax domicile in France when only one of these criteria is met.

Consideration of tax treaties

A person can be considered as having his tax domicile both in France in application of the above rules, and in another State, according to the rules of the latter. Each country applies its own rules, regardless of other legal systems.

There may therefore be a conflict of residence between two States, or even more in certain situations, according to the criteria adopted by each country.

In order to resolve this difficulty, the determination of the tax residence is then carried out in application of the possible tax treaty signed between France and the other State(s) in question.

Indeed, bilateral tax treaties define the notion of tax residence and specify the criteria for connecting to one or other of the signatory States, so that a person is considered as having his tax domicile only in a single state.

Determine your tax residence to secure your tax system

Thus, the determination of tax residence is not easy and necessarily requires questioning a range of clues according to economic, professional, family, social, or even nationality criteria.


The French tax specialist law firm CM-Tax and its team of English speaking French tax advisors, based in Lyon, Marseille and Toulon but operating throughout France, advises and assists on all subjects relating to French tax law - tax advice and tax litigation - as well as French property law. We also assist tne international community in the sale and acquisition of French real estate.