French tax residence: of the three criteria in Article 4 B, only one is sufficient

You are considered a tax resident of France if one of these three criteria is met: your home or main residence is in France, you primarily carry out your professional activity there, or you have the center of your economic interests there. Only one criterion is required. If another country also considers you a resident, the tax treaty between the two countries prevails and determines the applicable tax status.

Focusing solely on the first criterion, the length of stay, is an incomplete interpretation. Article 4 B of the General Tax Code, as interpreted by the tax authorities, sets out three criteria. All three must be considered.

Why this question decides everything

A non-resident is only taxed in France on their French-source income, subject to tax treaties. Therefore, determining one's residency status is the first question to consider when leaving, moving to, or returning to France.

The three criteria of Article 4 B

The BOFiP text is clear: it is sufficient that one of the criteria be met.

The three criteria are alternative. They are not cumulative.

Each criterion in detail

The home or main place of residence

Home refers to the place where one normally lives. Main residence refers to actual presence in France for more than six months during a given year.

This six-month threshold is not absolute. Generally, a stay of more than six months in France constitutes the principal residence, but this is not an absolute criterion. A shorter stay does not exempt the other two criteria from being considered. The doctrine we follow here does not mention a 183-day threshold: we do not use it.

The main professional activity

Having a professional activity, whether salaried or not, carried out in France as your primary occupation is sufficient to make you a resident. When you have several activities, the administration considers the one to which you devote the most actual time. Income is only a secondary criterion.

The government's public information sheet refers to main professional activity, while the official policy refers to salaried or self-employed professional activity. In both cases, it's the place of the activity within your schedule that matters.

The center of economic interests

This criterion considers where your main investments are located, the headquarters of your business, the administration of your assets, and the country from which the majority of your income originates. It is possible to have relocated your family and reduced your presence in France while still maintaining the bulk of your economic interests there.

If two countries consider you a resident

Sometimes France considers you a resident, and another country does the same. In this case, the "Residence" article of the tax treaty between the two countries determines which is which. The treaty definition of resident takes precedence over the domestic definition of tax domicile.

According to administrative doctrine (BOFiP), the order is as follows:

1. the permanent residential home; ;
2. the center of vital interests, that is to say the country with which your personal and economic ties are the closest; ;
3. the usual stay; ;
4. nationality.

This order is the one described by administrative doctrine. It must be checked on a convention-by-convention basis. We are not making any assertions here about any particular country.

Numerical example (fictitious profile)

Situation. Pierre, 49, runs a consulting firm. He moved abroad with his family. He spends about four months a year in France. From abroad, he dedicates 25 hours a week to international clients, and 15 hours in France to managing his French holding company. Of his €200,000 annual income, €140,000 comes from France.

Issue. Pierre considers that he is no longer a French tax resident: his home is abroad and he spends more time there than in France.

Strategy. Review the three criteria before departure, with supporting figures, then check what the agreement between France and your host country stipulates.

Result. My home and residence are abroad. My main activity is also abroad: 25 out of 40 hours are carried out from abroad. 62.5% of his working time. But €140,000 out of €200,000, or 70% Pierre's income comes from France. The center of his economic interests remains in France. One out of three criteria is met, and only one is needed: Pierre remains a tax resident of France. If his host country also considers him a resident, the tax treaty will determine the outcome.

This profile is fictitious. The figures illustrate the reasoning and do not represent a real case.

What changes depending on your situation

• Your time allocation between France and abroad, over the entire year.
• The nature of your activities and the place where each is actually practiced.
• The location of your income, your investments, and your business headquarters.
• The country you are leaving for, because the applicable convention may classify the criteria differently.