Determining tax residence and the principle of no double taxation
In order to correctly determine their tax residence, the taxpayer must be able to accurately identify 4 pieces of information:
- The taxayer’s familily ties and where the faimily reside.
- The source of the taxpayer’s business income (Is the taxpayer’s remuneration paid by a company outside their place of residence?)
- The assets the taxpayer owns (The various real estate assets that they might own in other countries, but also his bank accounts in which they hold financial assets).
- Whether the taxpayer has moved during a calendar or tax year (Remember : the UK has a different tax year to the one in France).
The taxpayer must determine their family, economic and professional situation to know where they are located for tax purposes. In the event of a conflict between two national laws, a tax treaty must be used to decide which law prevails.
The tax residence in France applies if the taxpayer is in one of the following 4 cases:
- A home in France which is the place of regular residence
- The taxpayer’s principal place of residence in France: The taxpayer must stay in France for more than 183 days during the same year
- Carrying out a professional activity in France
- Center of economic interests in France
Tax treaties: The non-double taxation
France has concluded tax treaties, but some countries have not concluded such an agreement with France. In this case, the income is taxable in principle in France.
- Either the agreement provides that the income is exempt in France: Exemption does not mean no declaration, the agreement will specify if this income must still be declared.
- Or the agreement provides that the income is taxable in France: The agreement provides for each type of income how to neutralize the non-double taxation suffered by this income. The foreign income will be declared on a specific form (2047).
The Maupard Fiduciaire team will be happy to help you in these procedures in order to examine the scheme that applies to you and therefore help you with your tax return (service n°8) [email protected]