Tax Residency and place of residence in France: A Simplified Guide to Understanding French Taxation

Main Criteria for Tax Domicile in France

The principal criteria for being deemed fiscally resident in France include:

• Having one’s main home or habitual place of residence in France,
• Carrying out a principal professional activity on French territory (excluding marginal activities),
• Having the centre of economic interests in France.

French case law further refines these elements, taking into account family ties, investments, and professional activities. Importantly, nationality is not a determining factor, unlike in countries such as the United States, where tax liability may depend on citizenship.

Since the 2025 French Tax Law, the definition of tax residency has been clarified: even if an individual meets one of the domestic criteria, they may not be considered a French tax resident if a double taxation treaty assigns their residence to another country. This reflects France’s commitment to respecting international tax conventions and avoiding double taxation.

 

The Role of International Tax Treaties

Double tax treaties, often aligned with the OECD Model Convention, play a crucial role in resolving residence conflicts. Under these agreements, a “resident” of a country is defined as someone who, due to personal or economic ties, is liable to taxation in that country.

These conventions take precedence over domestic law in cases of conflict. Their aim is to:

• Prevent double taxation,
• Ensure fair and equitable tax treatment,
• Clarify tax residency in cross-border situations.

Resolving Dual Residence Conflicts

When an individual qualifies as a tax resident in more than one country, arbitration rules are applied in a specific order:

1. Permanent home,

2. Centre of vital interests,

3. Habitual abode,

4. Nationality,

5. Mutual agreement between the relevant tax authorities.

This hierarchical approach ensures consistent and sovereign resolution of international tax disputes.

In practice, the French tax administration prioritises the application of international tax treaties. It first examines whether an individual meets the domestic tax residency criteria, then refers to the relevant convention to determine the final tax residency status. This step-by-step process ensures policy coherence and upholds France’s international tax commitments.

(See Schneider Electric ruling for further reference.)

 

Conclusion: French Tax Domicile and International Cooperation

In summary, determining tax domicile and residence in France involves specific legal criteria, supplemented by the application of international tax treaties to resolve any conflict. The French tax authorities must balance national rules with international obligations to ensure effective and fair taxation. The primacy of tax treaties, along with clear criteria, enables a transparent, internationally compliant fiscal framework that respects both territoriality and cross-border cooperation.