Tax domicile: definition, declaration and change

The tax domicile of an individual determines their place of taxation and the tax rules that apply to them, hence the importance of knowing the criteria for identifying them. What is a tax domicile in France? How to justify it? How to declare it? Is it possible to have two tax domiciles? Answers.

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What is a tax domicile?

Tax resident of France: definition

To qualify as a tax resident of France, the taxpayer must meet the criteria allowing them to be considered to have their tax domicile in France. A tax domicile corresponds to the place where a person must declare and pay their taxes.

Tax domicile determines the country where to pay taxes

Basically, if an individual has his tax domicile in France, he must declare and pay his taxes in France. In the case of income from foreign sources, certain international tax conventions may adjust the applicable rules. This is to avoid double taxation on the taxpayer.

How to determine your tax domicile?

Article 4 B of the General Tax Code (CGI) determines the criteria used to be considered tax domiciled in France.

Have your home in France or the place of your main stay

The tax domicile of an individual is in France if he lives there habitually and permanently with his spouse, his children or alone. In the absence of a home, France must constitute their main residence, that is to say that the taxpayer lives there for more than six months in the year.

Carry out a main professional activity in France, whether salaried or not

The tax domicile of a taxpayer is in France from the moment when he carries out a professional activity there as his main activity and when he devotes the most actual time there.

Having the center of its economic interests in France

This is the case if the individual’s income from French sources is greater than his income from foreign sources.

To note : all of these criteria are analyzed at the level of each person making up the household.

Being a state agent

State agents exercising their functions or carrying out missions in a country where they are not subject to personal tax on all of their income are also considered to be tax domiciled in France.

What are the differences between domicile, residence and tax home?

The tax domicile is the place of taxation of a person by application of French law. The concept of tax residence falls under bilateral international tax conventions making it possible to determine the place of taxation of an individual in the event of income from foreign sources. The tax household, for its part, refers to all the people registered on the same tax return.

Is it possible to have two tax domiciles?

Taxable income in two countries

An individual may have economic and family ties with two different countries, which may result in a dual tax domicile and, more precisely, a dual tax residence. This is for example the case if he:

• resides in France and works in another country (cross-border worker);
• is posted abroad;
• has retired in one country and is receiving a pension from another country.

In these situations, both countries are likely to claim taxes on the income of the person concerned, which would result in double taxation.

International tax conventions to avoid double taxation

However, many countries have entered into international tax treaties to avoid the problem. In most cases :

• the amount of taxes paid in the country of employment is deducted from the taxes due in the country of residence;
• income earned in the country of employment may be taxed in that country and exempt from tax in the country of residence.

If the person is considered a tax resident of France, they are then taxable on their income from French and foreign sources, subject to international conventions.

>> Our complete tax guide. How to declare your income? How to reduce your tax bill through investments? What to do in the event of an administrative audit?

Which tax domicile for a person in nursing home?

A departure to a nursing home has tax consequences, particularly those linked to tax domicile. If the elderly person stays more than six months per year in the nursing home, their tax domicile is transferred to the address of the nursing home. If she stays less than six months per year in a nursing home and she has retained her main residence, her tax domicile remains at the address of her main residence.

How to prove your tax residence in France?

Complete the online form on impots.gouv.fr

Tax residence certificates are available on the website of the Directorate General of Public Finances (DGFIP), in the “search for a form” section.

Receive the tax residence certificate

After completing the requested information, the tax administration studies the request and communicates the tax residence certificate to the applicant if his tax residence is well established in France.

How to declare your new tax domicile?

Provide your new address abroad

No longer having your tax domicile in France means no longer meeting one of the criteria cited above. For example, if the taxpayer has moved and has been living in another country for more than six months, he becomes a non-resident. He must first declare his new address abroad to the public finance center. This declaration can be made via its specific space on the tax website.

Declare your income

Even if his tax domicile is no longer in France, the taxpayer must, the year following departure, declare the income received during the year of departure. In the event of expatriation, the income tax of a French person living abroad depends on their tax domicile. If he is located outside France, he must pay taxes in France on his income from French sources, unless there are provisions that could result from a tax treaty.