Determination of tax residency

Date of update

 

Tax residency is not a matter of choice; it depends on internal regulations or reciprocal agreements and treaties.

Irrespective of nationality, you will be considered to be resident in France for tax purposes if one of the following criteria is met:

  • 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 which, the tax authorities in the two countries may be asked to decide upon your tax residency.

People in France who are not tax residents are only taxed on income from French sources.

Residents of France are taxed on the entirety of their income earned from French sources or from foreign sources.

International tax treaties may also provide for specific arrangements.

 

 

For further details, please see the list of bilateral tax treaties that France has signed.

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The tax status of the director varies according to the legal status of their company (EURL, SARL, SA, etc.) and the type of income tax system chosen for the company:

  • Company subject to corporate tax: corporation tax is a tax regime that separates the company’s profit from the director’s income.
  • Company subject to income tax: the director’s professional income is subject to the tax rate applicable to their income bracket, just like all their other income, and forms part of the taxable income of their tax household.

View our publication Make a French Start: Setting Up Your Business in France

Doing business in French overseas departments and regions

 

In addition to access to the full range of support measures for companies operating throughout France, the government has its own provisions for investment aid in the overseas departments and regions (Guadeloupe, Martinique, French Guiana, Reunion Island and Mayotte), an innovation tax credit and a research tax credit at higher rates than in mainland France, and specific measures for exemption from social security contributions.

Companies setting up in the overseas departments and territories (Guadeloupe, Martinique, French Guiana, Reunion and Mayotte) can benefit from special tax measures and in particular:

  • An allowance for the company director subject to income tax:
    • 30% for a company established in Guadeloupe, Martinique or Reunion Island, not to exceed €2,450;
    • 40% for a company established in Guiana or Mayotte, limited to €4,050.
  •  Tax reductions or tax deductions for productive investments in overseas France;
  • Tax credits for productive investments in overseas departments.

For more information, please visit the website impôts.gouv.fr and the BPI website

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