First, we need to know the difference between the right to be somewhere, ie. temporarily reside there, and becoming fiscally resident: changing where you declare your global income, gains and assets for tax purposes. It is important to note the basis for defining tax residency is not the same in France as it is in the UK, so the number of days spent in a country is not the only consideration. In fact, the main French laws defining residency do not even discuss the number of days spent in this country. Residency rules are clarified both in Article 4B of the French tax code and Article 3 of the UK/France Double Tax Treaty.
The first of the definitions highlighted is the foyer ou le lieu de séjour principal, thus where your main residence or home is situated.The Double Tax Treaty states “he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him”. This may be accommodation that you own or is (officially) rented.
What is essential is that it is available for your use and under your control, so if the property is owned by you, but is rented out, this is not deemed to be a home. Also, you may not use the address of siblings, children, parents or friends.Therefore, if your only property is in France, you are considered French resident from the day you disposed of your other property. If you can demonstrate that a property outside France is used by you as your permanent home (eg. the bills are in your name at that address), you can argue your residency either way on this rule.
The next main rule is where you spend “most of your time”. Many ancillary laws, both French and in the tax treaty, refer to 183 days, but it is important to understand that:
- If you spend less than this time in France, but it is where you have spent “most” of your time, you will still be considered resident;
- Once you have spent 183 days in France, you are not deemed resident from the 183rd day, but from the day of arrival.
Gaining the right to reside in France (in the sense of a right to live) does not confer the right to residence elsewhere in the EU or Schengen, but just that one country.
For more information concerning the change of your tax residence, please feel free to contact Advanced Consultants SA.