Tax residency: the four criteria of Article 4 B of the CGI

The first is the household (foyer). It refers to the place where the person and their family normally live, that is, the place of habitual residence, regardless of stays elsewhere for professional or exceptional reasons.

The second is the place of principal stay, used when the household cannot be determined. It is assessed by comparing the length of presence in France with the time spent in each other State.

The third is carrying on a professional activity in France, unless it is carried on there on an ancillary basis.

The fourth is the centre of economic interests: the place of the main investments, of the seat of business, or the place from which the person manages their assets and derives most of their income.

These four criteria are alternative. Just one is enough to establish tax domicile in France, and this is what most would-be leavers do not know.

A useful point for couples: tax domicile is assessed person by person, not by tax household. It is therefore legally possible for one spouse to be domiciled in France and the other abroad, with the reporting consequences that entails.

This situation, common when only one member of the couple moves abroad for work, calls for specific treatment. It is also one of the configurations in which the household criterion works most clearly against the taxpayer who believes they have left.

The most widespread reasoning is to count one's days and conclude that by spending less than half the year in France, one is no longer domiciled there. This reasoning is wrong.

The place of principal stay is only the second criterion, and it is examined only if the household cannot be determined. A spouse and children who remain in France are enough to establish the household, whatever the presence of the person concerned.

Likewise, a business owner whose operating company and main assets remain French keeps the centre of their economic interests in France, even if they live abroad all year round.

Foreign thresholds offer no more protection. Portugal, Spain and Italy use more than 183 days¹, Thailand 180 days², Switzerland 90 days³ without gainful activity: crossing one of them creates a dual residence; it does not remove the French one.

When two States claim the same person, the treaty concluded between them breaks the tie, using criteria applied in order.

The first is the permanent home. If the person has one in both States, the centre of vital interests is used, that is, the closest personal and economic ties.

If that centre cannot be determined, habitual abode is used, then nationality, and as a last resort a mutual agreement between the tax administrations.

A home kept in France and available all year round therefore weighs from the very first criterion, and it is often what tips a case — more than the number of days.

The treaty must still be invocable, which requires a certificate of tax residency issued by the host State. A residence permit, even a long one, is no substitute.

1. Housing: sell or let the French home on a long-term basis, or document that it is unavailable.
2. Family: the move of the spouse and the children's schooling carry more weight than anything else.
3. Activity: actual place of work, contracts, clients, decisions.
4. Economic interests: location of assets, accounts and sources of income.
5. The certificate of tax residency from the host country, without which the treaty remains ineffective.

Finally, departure triggers the exit tax when securities reach more than €800,000⁴ or more than 50%⁵ of a company's profits, for a person who has been resident for at least from 6 years⁶ of the last ten years. Outside the European Economic Area, the deferral request must be filed at least from 90 days⁷ before the transfer.