French tax residence: the 183-day rule
The 183-day rule is a commonly used criterion for determining French tax residence. A person’s tax
residence has an impact on their taxation regime in terms of income tax, inheritance tax, gift tax and
property wealth tax. To define this concept, it is essential to understand the criteria set out in article
4A of the French General Tax Code.
According to these criteria, a person is considered to be resident in France for tax purposes if he or
she meets one of the following criteria:
- Having a home in France, or failing that, have a principal place of residence in France for
more than 183 days. In this case, the main residence criterion takes precedence over the
home criterion. - Carrying out a professional activity in France, whether as an employee or not, unless it is
incidental. - Having the center of economic interests in France, which includes the main investments, the
place of business, the professional activities or the main source of income.
It is sufficient to meet one of these criteria to be considered as a French tax resident. However, it is possible for a taxpayer to be considered as a tax resident of two different states, which can lead to a conflict of residence.
In the event of a residency dispute, bilateral tax treaties between the two States is applied to solve the issue. Most of these treaties are based on the model proposed by the OECD and provide for successive criteria for determining tax residence.
It is important to note that the 183-day rule is often misinterpreted. In practice, the criterion for tax residence in France is determined by taking into account several factors, such as domicile, main place of residence, professional activity and economic interests.
If you are unable to determine a home, your tax domicile will be defined by your main place of
residence, (i.e. the place where you have stayed for the longest period of time). If you stayed in
France for more than 183 days in the same year, you will automatically be considered as a French tax
resident.
Furthermore, even if your stay in France is less than 183 days, but longer than your stay abroad, you
will be considered as a French tax resident.
If you do not have a domicile or principal residence in France, the tax authorities will examine the
professional criteria. If you have a professional activity in France, whether salaried or not, unless it is
incidental, you will be considered as a French tax resident. Similarly, if you have the centre of your economic interests in France, such as your main investments, your company’s headquarter, your main professional activities or the main source of your income, you will also be considered as a French tax resident.
In summary, you will be considered a French tax resident if you meet one of the following criteria:
– You are domiciled in France.
– Your main place of residence is in France.
– You carry on a non-incidental professional activity in France.
– The centre of your economic interests is in France.
It is important to note that you may be considered as a tax resident of several countries at the same time. In such a case, international tax treaties may apply to avoid double taxation.
MFL english speaking referenced lawyers remain at your entire disposal to answer your queries on such a topic. We will provide you with our best lawyer to handle the issue you face and provide you with accurate advices to determine your tax residence and obligations.