When you are a tax resident of France, tax is payable on all income regardless of where in the world it comes from (with a few exceptions arising from international tax treaties).
When you are a tax resident abroad, and therefore not a tax resident of France, only French-source income is taxable.
There is therefore a major difference between the two statuses.
Defining Your Tax Residence Abroad
The place of tax residence is defined by the French General Tax Code (Code général des impôts, CGI) as the place where a person has their permanent home or the place where they carry on their professional activity or the centre of their economic interests (art. 4 B of the CGI). A person is also considered a tax resident of France if they reside there for more than 183 days during a calendar year. However, this rule may vary depending on international tax treaties.
Supporting Documents to Prove Your Tax Residence Abroad
To prove your tax residence abroad, you may provide one of the following supporting documents:
- A tax assessment notice from the country of tax residence (it must show the tax identification number);
- A certificate of tax residence issued by the authorities of the country concerned (it must be less than 3 months old and show the tax identification number);
- The CERFA 5000-FR form for the current year, which must be signed by the tax authorities of the country of main residence;
- A certificate from a local tax authority that includes the information contained in the French CERFA 5000-FR form.
These documents may be requested by the tax authorities of the country where you are a tax resident, and may differ from one country to another.
It is therefore important to find out which documents are required in each country.
Please note that a simple water or electricity bill is not sufficient to prove your tax residence in a country.
International Tax Treaties
The purpose of international tax treaties is to define the tax rules applicable to persons who reside in two different countries.
These treaties make it possible to avoid double taxation by determining the country in which the tax must be paid.
In France, for example, tax residents abroad who receive French-source income must in principle file a tax return in France, in addition to the one due in the country where they reside.
However, France has signed tax treaties with many countries, which makes it possible to avoid double taxation through the application of specific rules.
Means of Proof Under International Tax Treaties
International tax treaties have specific rules for proving tax residence abroad. Thus, if it is not possible to provide the CERFA 5000-FR form, it may sometimes be sufficient to provide the following supporting documents:
- An employment contract or payslips from abroad;
- Documents proving enrolment in a school or university abroad; - Bank account statements from abroad;
- Electricity, telephone, water, gas or rent bills from abroad.
It is important to stress that each international tax treaty may have its own rules.
Proving your tax residence abroad can be a complex process, but it is essential in order to avoid any tax confusion. It is important to refer to the international tax treaties and to provide solid evidence to the tax authorities.
And to avoid any mistakes, since tax treaties are often incomprehensible to non-specialists, it is advisable to be properly assisted by a tax lawyer.
