French Tax Resident

[AnOther]

It's not Cat saying that though is it, she's just summarised from the legislation.

séjour principal is principal residence, but that's not what we're talking about is it. Besides, if France is your séjour principal 183 days will, in most cases, be irrelevant in determining your residency.

[Will]

It doesn't actually give a number of days. But most authorities seem to be agreed that if you spend more time in France than in any other country (which is covered under 'habitual abode' in Cat's quote) you will be deemed to be resident in France. Note that we are only talking about 'residence' for tax purposes and also - importantly - to determine where you have to pay social security charges and where you are covered by the health system.

So if you divide your time between France and England, then the figure is 183 days in France; if you spend time in other countries then it could be considerably less. It's really an argument about semantics.

[allanb]

[quote user="Will"]So if you divide your time between France and

England, then the figure is 183 days in France; if you spend time in

other countries then it could be considerably less.[/quote]I think that

sums it up.  But just to answer AnOther's point, séjour on its own means a period of time, not a place.  The law refers to a person's lieu de séjour principal, which means something like "the place where he spends the most time".

[lacote0_0]

From impots.gouv.fr :

Vous êtes considéré comme domicilié fiscalement en France si vous répondez à un seul ou plusieurs de ces critères :

• Votre foyer (conjoint ou partenaire d'un PACS et enfants) reste en France au lieu de votre résidence principale,
  même si vous êtes amené, en raison de nécessités professionnelles, à
  séjourner dans un autre pays temporairement ou pendant la plus grande
  partie de l'année.
  A défaut de conjoint ou enfants, le foyer se définit comme votre lieu de résidence habituelle, votre lieu de séjour principal. La France est considérée comme le lieu de séjour principal si vous y séjournez plus de 6 mois au cours d’une année donnée.  

• Vous exercez en France une activité professionnelle salariée ou non, sauf si elle est accessoire.

• Vous avez en France le centre de vos intérêts économiques.
  Il s’agit du lieu de vos principaux investissements, du siège de vos
  affaires, du centre de vos activités professionnelles, ou le lieu d’où
  vous tirez la majeure partie de vos revenus.

http://www.impots.gouv.fr/portal/dgi/public;jsessionid=UNT1UBLF2RMRZQFIEMQSFE4AVARW4IV1?paf_dm=popup&paf_gm=content&paf_gear_id=500018&typePage=cpr02&docOid=documentstandard_5048&espId=0&temNvlPopUp=true&hlquery=sejour+principal

[Will]

Thanks for that, which pretty much confirms things. Rather less obviously, it confirms that in France tax residence and domicile are the same thing, whereas HMRC has a quite different definition in HMRC6. But getting deeply into that will only muddy things further.

[bigears]

hi

so if you make a tax declaration in france you are tax resident in france and therefore regarded as domicile in france. Did someone not say you can only be domicile in one member state?

With regard to the original post. I was in that same positio 4 years ago when I retired in my mid 50s. I stayed the majority of the first year in france whilst doing renovation work whilst my wife continued to work in the uk full time. She has since retired, but still works pt a little in the uk. She spends no more than 6 months a year in france and I a little more, we could not say absolutely as we don't keep records. My advice to the poster would be as I have already stated in the two previus posts. You experts can discus the official position but in practice I would say the french tax man would not be interested in such cases unless they were a mr big type. By all means discus these issues its very interesting but be carefull what advice you give to people who might actually take it and cause problems for themselves somewhere down the line.

I'll be back to sunny france soon away from this dreadfull uk weather.

[parsnips]

[quote user="bigears"]hi

so if you make a tax declaration in france you are tax resident in france and therefore regarded as domicile in france. Did someone not say you can only be domicile in one member state?

With regard to the original post. I was in that same positio 4 years ago when I retired in my mid 50s. I stayed the majority of the first year in france whilst doing renovation work whilst my wife continued to work in the uk full time. She has since retired, but still works pt a little in the uk. She spends no more than 6 months a year in france and I a little more, we could not say absolutely as we don't keep records. My advice to the poster would be as I have already stated in the two previus posts. You experts can discus the official position but in practice I would say the french tax man would not be interested in such cases unless they were a mr big type. By all means discus these issues its very interesting but be carefull what advice you give to people who might actually take it and cause problems for themselves somewhere down the line.

I'll be back to sunny france soon away from this dreadfull uk weather.[/quote]

Hi,

      I have to say I agree with bigears. In the real world, if you yourself are aware of the basic rules, but not sure where you should declare because you divide time between the UK and France, then carry on declaring only in the UK (be aware ,however ,that this could cost you, as you are likely to pay less tax in France). In several cases I have known, when after quite some time the french authorities find you ,and think you are french resident, they will write you a letter enclosing a current declaration and inviting you to complete it. Provided you respond within the stated time limit you will suffer no penalty.  This is the time when ,if you don't believe you are french resident, to start having the technical arguments with them. You should bear in mind that if you "give in" you may well end up gaining. I had one friend who fought the french taxman for 6 years over whether his NHS related pension should stay  taxable, as he thought, in the UK, or in France. When I finally persuaded him to check with HMRC and they told him he should be taxed in France, he ended by paying 3 years back tax in France(at a much lower rate), but under UK rules he got a 6 year refund and finished £4000 up!   

[Tony F Dordogne]

Leaving aside the often quoted 183 day rule, all the UK legislation is based on the following:

"The definition of residence adopted by the Commission is not a finite definition and indeed, for the purposes of the social chapter of the EU it accords with English Common law, last define by the House of Lords in 1982 as  being where you have your usual abode, where you have your settled way of life, even though you may be absent for periods, it is the place you intend to return to, the place you regard as your home."

Broadly, you either have a permenant base or you are itinerant.  Everybody knows where they actually live, it's not a case of domicile or any of the expressions used by 'lateral thinkers' to try to circumvent the regulations.  When in doubt, fall back on this definition and all will either become or remain clear.

[Will]

I'm with parsnips on this one - for normal people it is not really important exactly where you pay tax, as long as you do somewhere (I know the pedants will disagree with that). And sometimes, as parsnips says, it can be beneficial to be fiscally resident in France - which is where this rather daft discussion started, from a suggestion that somebody in the original questioner's position might be better off should he have to pay capital gains tax on the house he had been lovingly rebuilding. Just as domicile could become highly relevant in inheritance tax issues.

Tax isn't really a big deal (until you get into big sums like house sales, inheritance, or until French wealth tax rears its head). Where you pay for, and receive, health and social security cover is a much more important issue for day to day living. 

[AnOther]

As a French resident I would dearly love to pay my tax in France, if that was, HMRC would let me out of their clutches [:(]

[allanb]

[quote user="Will"]For normal people it is not really important exactly where you pay tax, as long as you do somewhere (I know the pedants will disagree with that). And sometimes, as parsnips says, it can be beneficial to be fiscally resident in France - which is where this rather daft discussion started...[/quote]I don't think it's a daft discussion.  Perhaps I'm numbered among the pedants, but it seems to me that if someone raises a question about what the law says, the best response is to state what the law says.

If you have reason to think that the law is not always applied, that's useful information too.  But I think it's best to be cautious in saying so; you may need to know quite a lot about an individual's circumstances before you say that he can safely ignore the law.

[lacote0_0]

[quote user="allanb"][quote user="Will"]For normal people it is not really important exactly where you pay tax, as long as you do somewhere (I know the pedants will disagree with that). And sometimes, as parsnips says, it can be beneficial to be fiscally resident in France - which is where this rather daft discussion started...[/quote]I don't think it's a daft discussion.  Perhaps I'm numbered among the pedants, but it seems to me that if someone raises a question about what the law says, the best response is to state what the law says.

If you have reason to think that the law is not always applied, that's useful information too.  But I think it's best to be cautious in saying so; you may need to know quite a lot about an individual's circumstances before you say that he can safely ignore the law.

[/quote]

You can count me among the pedants too.

I am advised that the French authorities can and do enforce the strict letter of the 183 day rule, and that they have access to credit card and autoroute badge statements to prove presence in France.

[Will]

Discussions like this usually degenerate into daftness because in the vast majority of cases the position is clear, but there is always somebody who tries to find a loophole in the legislation which could result in them not having to be treated like the rest of us (though wherever they pay their tax will probably make a negligible difference to their financial affairs). The discussions then get so bogged down in the finer points of double taxation agreements and the definitions of words and concepts that the original points are lost. For some reason the simple concept of residence is particularly prone to such trading of pedantry.

Of course the authorities can check up and act on offenders. But only when it is worth their while to do so.

My advice is still to forget about tax - it's health and social security payments and cover that are a much bigger issue for those living in France either full- or part-time.

If you will allow me my own small bit of pedantry, there is no '183 day rule' in French taxation.

[bigears]

hi

so the french tax man has a 183 day rule and they do apply it. I personally havn't heard this, I have only heard the opposite where they cannot be bothered to open up a dossier. My brief chat to a tax person was ended abruptly when I said I had a house which was my principal residence in the uk. To track an individuals movements will have a significant cost in time and money and it will give limited information. I cannot see it being done routinely, except for a mr big type. If people have personal experience of the french tax people agressivly investigatihg them in a very thorough way, using that sort of evidence please share it, I'm sure a lot of us would like to know., especially if its someone just straying over the 183 days whilst doing up a maison secondaire.

[allanb]

[quote user="Will"]

If you will allow me my own small bit of pedantry, there is no '183 day rule' in French taxation.[/quote]My bit of counter-pedantry: it is true that 183 days is not directly mentioned in the relevant article in the French tax code (earlier I incorrectly said it was, for which I have abjectly apologized).  But the code does say that if you spend more time in France than anywhere else in the course of a year, you fulfil one of the criteria for residence - and one is enough.

It is simple arithmetic to work out that if you spend 183 days in France you have spent a larger part of the year in France than anywhere else.  This interpretation is confirmed by many French legal sources, and anyway I don't know what other interpretation is possible.

[Will]

Here we go again... [:D]

The difference, as I see it, is that UK tax documents such as HMRC6 specifically mention 183 days (though they qualify that using the 90 day rule). In the French system, though, residence depends on (among other factors) spending more time in France than anywhere else. If time is divided between France and Britain then the figure is indeed 183 days. But if you spend, say, 150 days in France, 120 in Britain and 95 in Saudi Arabia (perhaps) then you qualify as French tax resident despite spending fewer than 183 days there.

Sorry if I am wrong, and I am not a tax expert, but that's how I read the rules.

[allanb]

[quote user="Will"]If time is divided between France and Britain then the figure is indeed 183 days. But if you spend, say, 150 days in France, 120 in Britain and 95 in Saudi Arabia (perhaps) then you qualify as French tax resident despite spending fewer than 183 days there.[/quote]Agreed.

If you spend 183 days of the year in France, you are resident.

If you spend some shorter period, you may be resident, depending on where else you've been.  But that's been said before, and I thought that if I mentioned it again, I might be accused of pedantry...

[Will]

Pedantry - never. What, on this forum? [:D]

Nice to end up in agreement. Of course, even in UK if you spend fewer than 183 days it doesn't necessarily mean you are not resident (as HMRC6 says).

I remember back in the 1970s when I was doing contract work there were an awful lot of colleagues who would work in Britain for nearly half the year, work in Germany for nearly half the year and just go off somewhere else nice for three weeks or so. They were mostly single people, with no permanent home as such - some even lived in motor homes - and they ended up quite legally not paying tax anywhere. I don't think they would get away with it now, particularly where healthcare provisions are concerned, but they did very nicely out of the system back then.

[bigears]

Always fly back to the uk before and after going to other countries such as in the example saudi, then the french will not be able to claim you have spent more time there than any other country.