Planning to move abroad?
Are you living in France and planning to move abroad?
What formalities need to be completed? How do you prepare for your departure? What rules do you need to follow after your departure to ensure you comply with French tax regulations?
Simply moving abroad is not enough to lose your status as a French tax resident
Under French law, a person is considered to have his or her tax domicile in France if he or she meets one of the following alternative criteria:
- Main home or place of residence (1) in France
- Main professional activity in France
- Center of economic interests in France
- Government employees.
In the event of conflict of residence => application of treaty residence criteria (provided a treaty has been signed between France and the host country).
Tax treaties signed on the OECD model settle residence disputes on the basis of successive, hierarchical criteria:
- The permanent home, or failing that,
- The center of vital interests, or failing that,
- The place of habitual residence, or failing that,
- Nationality,
- Determination according to any amicable agreements concluded between States.
So, even if you live abroad with your family for most of the year, you may still be considered a French tax resident if, for example, you keep the center of your economic interests in France (main professional activity, exclusive source of income, etc.).
Remember: as a matter of principle, French tax residents are taxed in France on their worldwide income and worldwide real estate assets.
(1) Please note! The 183-day rule does not apply in the year of transfer of domicile.
What formalities need to be completed on departure?
The “quitus fiscal” formality (obligation to file a tax return within 30 days of departure and pay the corresponding taxes) was abolished in 2004.
However, you are still required to inform the tax authorities of your new address within two months of moving abroad (via your account on www.impots.gouv.fr).
You will continue to be taxable in France on income received between January 1 and the day of the year of your departure, and must therefore file a standard 2042 tax return within the income tax deadline applicable to non-residents in N+1.
If you retain French-source income such as property income, you will be required to file a 2042-NR return each year within the income tax filing deadline applicable to non-residents.
Leaving France – non-tax considerations
- Matrimonial considerations – what matrimonial property regime applies in the event of divorce?
Depending on the date of marriage, and in the absence of a marriage contract or designation by the spouses of the applicable law, there is a risk that the law (and therefore the legal regime) of the spouses’ country of habitual residence will apply.
- Inheritance considerations
In the absence of an option formulated by the deceased, application of the law of succession of the State of habitual residence of the deceased.
Exception: application of the law of succession of the State with which the deceased had manifestly closer ties.
Our lawyers are at your disposal to answer all your questions and advise you. Our meetings can be held face-to-face or by videoconference. You can make an appointment directly online at www.agn-avocats.com.
AGN AVOCATS – Tax Department
09 72 34 24 72
