When you arrive in France, it is important to understand the various tax obligations that apply depending on your situation. Taxes are an unavoidable reality of life in society, and it is important to comply with them in order to avoid any risk of penalties. In this article, we will examine the various situations that may arise in terms of taxation for people arriving in France.
The Case of Expatriates Returning to France
The first case we will examine is that of expatriates returning to France after a period abroad.
If you are in this situation, be aware that you will be subject to income tax in France. If you return to live and work in France, you will obtain tax resident status in France. In this case, you will be taxed on the income you receive in France, but also abroad if applicable.
Important: in some cases, you may benefit from the inpatriate tax regime (régime fiscal des impatriés), which is very advantageous. The inpatriation regime applies to you if you were tax domiciled outside France during the five years preceding your new position in France. Thanks to this regime, you will be able to benefit from tax reductions.
If, on the other hand, you are a non-resident for tax purposes in France (if you have neither your home or main place of stay, nor your main professional activity, nor the centre of your economic interests in France), you will be taxed only on your French-source income.
It is also important to note that if you have returned to France under an employment contract, you may be eligible for a tax credit.
This tax credit is capped at the amount of tax you would have paid in France on the same income, and can be used to reduce your tax bill.
The Case of Foreign Nationals Arriving in France
If you are a foreign national who has arrived in France, your tax obligations depend on your status. If you are a French tax resident, you will be taxed on all of your income, whether received in France or abroad. To be considered a French tax resident, you must meet one of the following criteria:
- Having your family in France (spouse, civil partner (PACS), minor children, etc.)
- Having the majority of your income or assets of French origin
- Spending half the year in France (main place of stay)
- Carrying out your main professional activity in France
If you do not meet any of these criteria, you will in principle not be considered a French tax resident, and you will therefore be taxed only on your French-source income.
Finally, it is important to note that foreign nationals arriving in France must declare their income like any French citizen. Likewise, foreign nationals are subject to property tax (taxe foncière) if they own property in France. They are also subject to the residence tax (taxe d'habitation) if they own a second home in France. In all cases, it may be wise to seek advice from a tax lawyer to avoid tax errors when returning to or arriving in France.
