Understanding tax residency
Tax residency determines in which country you pay taxes on your worldwide income. It is the starting point of any expatriation strategy.
The 4 French criteria (art. 4B of the CGI)
France considers you a tax resident if you meet at least one of these criteria. A single one is enough to trigger worldwide taxation in France.
Criterion 1: home or primary place of stay
Your home (family: spouse + children) is in France, OR you reside there more than 183 days per year. This is the most commonly invoked criterion.
Criterion 2: main professional activity
You carry out a professional activity in France as your main occupation (not ancillary). Applies to seconded employees, executives, etc.
Criterion 3: center of economic interests
France is the place where you have made your main investments, where you manage your business affairs, or from which the bulk of your income originates.
Note: the 183-day rule is not sufficient
Many people think spending fewer than 183 days in France is enough. FALSE: if your home or economic interests are there, you are a French tax resident even with 0 days on site.
The tie-breaker in tax treaties
In case of dual residency (both France AND another country claim you), the bilateral tax treaty applies with a cascading priority rule:
Changing tax residency: the step-by-step guide
Leaving French taxation is a 3-phase process. Booking a plane ticket is not enough.
PREPARE: 6 to 12 months before departure
EXECUTE: the month of departure
CONSOLIDATE: the first 3 years
⚠️ The 5 mistakes that derail a residency change
Exit Tax: the departure tax
The exit tax (art. 167 bis CGI) taxes unrealized capital gains on your holdings when you leave France. It is not a tax on an actual sale, but on unrealized gains.
Who is affected?
You are subject to the exit tax if you meet both conditions:
- You have been a French tax resident for at least 6 of the last 10 years
- You hold participations (shares, debt instruments, FCPR/FPCI) whose total value exceeds EUR 800,000 or represents more than 50% of a company's capital
How is it calculated?
Tax base = market value on the day of departure - acquisition price.
Tax rate = 30% (PFU: 12.8% income tax + 17.2% social levies) on capital gains, or the progressive scale if elected.
A specific declaration must be filed within 30 days of the transfer of tax domicile (form 2074-ETD).
Payment deferral: the key point
| Destination | Automatic deferral? | Guarantees required | Outcome |
|---|---|---|---|
| EU / EEA (Portugal, Malta, Cyprus, Romania, Bulgaria, Hungary, Czech Rep.) | ✅ Automatic | None | Tax triggered upon actual sale of securities |
| Non-EU with treaty (Dubai, Thailand, Morocco, Vietnam, Mexico...) | 🔶 On request | Guarantees (bank guarantee or pledge) based on amount | Tax triggered on sale, return to France, or after 5 years |
| Countries without a treaty (Georgia, Panama, Uruguay, Costa Rica) | ❌ No | Immediate payment before departure | Payment due upon transfer of domicile |
Bilateral tax treaties
Bilateral tax treaties (DTTs) allocate taxing rights between two states to avoid double taxation. France has signed over 120 of them. They take precedence over French domestic law.
📌 What a treaty covers
- Art. 4-5: tax residency and permanent establishment
- Art. 10: dividends (withholding tax, reduced rates)
- Art. 11: interest
- Art. 12: royalties
- Art. 13: capital gains
- Art. 15: employment income
- Art. 18: pensions and retirement
- Art. 23: method for eliminating double taxation
⚠️ What a treaty does NOT do
- It does not create a new tax residency: you must actually change it first
- It does not eliminate French filing obligations (3916, 2047...)
- It does not apply to social contributions (CSG/CRDS), except under EU regulations
- It does not protect against exit tax on participations
- It does not cover the IFI (real estate wealth tax), except in a few specific treaties
Treaty status with our 20 destinations
| Country | Treaty with France | Dividend WHT | Interest WHT | Pensions |
|---|---|---|---|---|
| 🇪🇪 Estonia | ✅ Yes (2011) | 5-15% | 5-10% | Taxed in France (French residents) |
| 🇦🇪 Dubai (UAE) | ✅ Yes (1989) | 0% | 0% | Taxed in country of residence |
| 🇮🇩 Bali (Indonesia) | ✅ Yes (1979) | 10-15% | 10-15% | Taxed in country of residence |
| 🇵🇹 Portugal | ✅ Yes (1971, rev. 2016) | 15% | 12% | Taxed in country of residence |
| 🇲🇦 Morocco | ✅ Yes (1970) | 15% | 15% | Taxed in country of residence |
| 🇹🇭 Thailand | ✅ Yes (1974) | 10-20% | 10-25% | Taxed in country of residence |
| 🇲🇽 Mexico | ✅ Yes (1991) | 5-15% | 5-15% | Taxed in country of residence |
| 🇬🇪 Georgia | ❌ No | N/A (domestic law) | N/A | Double taxation possible |
| 🇷🇴 Romania | ✅ Yes (1974) | 10% | 10% | Taxed in country of residence |
| 🇵🇦 Panama | ❌ No | N/A (domestic law) | N/A | Double taxation possible |
| 🇷🇸 Serbia | ✅ Yes (inherited from Yugoslavia) | 15% | 0% | Taxed in country of residence |
| 🇨🇷 Costa Rica | ❌ No | N/A (domestic law) | N/A | Double taxation possible |
| 🇨🇾 Cyprus | ✅ Yes (1981) | 10-15% | 10% | Taxed in country of residence |
| 🇲🇹 Malta | ✅ Yes (1977) | 10-15% | 10% | Taxed in country of residence |
| 🇨🇴 Colombia | 🔶 Yes (2015) | 5-15% | 10% | Taxed in country of residence |
| 🇨🇿 Czech Rep. | ✅ Yes (revised) | 10% | 0% | Taxed in country of residence |
| 🇧🇬 Bulgaria | ✅ Yes (1987) | 5-15% | 0-10% | Taxed in country of residence |
| 🇭🇺 Hungary | ✅ Yes (1980) | 5-15% | 0% | Taxed in country of residence |
| 🇺🇾 Uruguay | ❌ No | N/A (domestic law) | N/A | Double taxation possible |
| 🇻🇳 Vietnam | ✅ Yes (1993) | 10-15% | 10% | Taxed in country of residence |
* Withholding tax rates shown are those applicable on the French side for payments to these countries (dividends from French companies paid to non-residents). Effective rates depend on the type of participation and the applicable treaty.
Tax comparison: 20 destinations
Verified data (PwC Tax Summaries, EY Worldwide Tax Guide, KPMG), April 2026.
| Country | PIT (non-residents) | CIT (corporate) | Local dividends | Wealth tax | Tax rating |
|---|---|---|---|---|---|
| 🇦🇪 Dubai (UAE) | 0% | 0-9% | 0% | 0% | ⭐⭐⭐⭐⭐ |
| 🇬🇪 Georgia | 0% (foreign income) | 0% reinvested / 15% distributed | 5% | 0% | ⭐⭐⭐⭐⭐ |
| 🇵🇦 Panama | 0% (foreign income) | 25% (local income) | 5-10% | 0% | ⭐⭐⭐⭐⭐ |
| 🇧🇬 Bulgaria | Flat 10% | 10% | 5% | 0% | ⭐⭐⭐⭐⭐ |
| 🇭🇺 Hungary | Flat 15% | 9% (lowest in the EU) | 15% | 0% | ⭐⭐⭐⭐⭐ |
| 🇪🇪 Estonia | Flat 22% | 0% reinvested / 22% distributed | 22% (on distribution) | 0% | ⭐⭐⭐⭐ |
| 🇷🇴 Romania | Flat 10% | Micro-CIT 1-3% (under EUR 250K) | 8% | 0% | ⭐⭐⭐⭐ |
| 🇷🇸 Serbia | Flat 15% | 15% | 15% | 0% | ⭐⭐⭐⭐ |
| 🇨🇾 Cyprus | 0-35% (exemption EUR 19,600) | 12.5% | 0% (non-dom) | 0% | ⭐⭐⭐⭐ |
| 🇲🇹 Malta | Non-dom: remittance basis | 35% nominal / ~5% effective | 0% (non-dom) | 0% | ⭐⭐⭐⭐ |
| 🇺🇾 Uruguay | 0% (foreigners, 11 years max) | 25% (local income) | 7% | 0% | ⭐⭐⭐⭐ |
| 🇨🇷 Costa Rica | 0% (foreign income) | 30% (local income) | 15% | 0% | ⭐⭐⭐⭐ |
| 🇵🇹 Portugal | IFICI 20% (qualified) / 28% std | 21% (17% SMEs) | 28% | 0.7-1.5% (AIMI) | ⭐⭐⭐ |
| 🇹🇭 Thailand | LTR: exempt / Std: 0-35% | 20% | 10% | 0% | ⭐⭐⭐ |
| 🇨🇿 Czech Rep. | Flat 15-23% | 21% | 15% | 0% | ⭐⭐⭐ |
| 🇮🇩 Bali (Indonesia) | 5-35% progressive | 22% | 10% | 0% | ⭐⭐⭐ |
| 🇲🇦 Morocco | 0-38% progressive | 20-35% | 15% | 0% | ⭐⭐ |
| 🇨🇴 Colombia | 0-39% progressive | 35% | 10% | 1-1.5% | ⭐⭐ |
| 🇲🇽 Mexico | 1-35% progressive | 30% | 10% | 0% | ⭐⭐ |
| 🇻🇳 Vietnam | 5-35% progressive | 20% | 5% | 0% | ⭐⭐ |
Dividends & capital income
Once you are no longer a French tax resident, your situation regarding capital income changes radically. Here is what changes.
🇫🇷 Dividends from French companies
As a non-resident, dividends paid by French companies are subject to a French withholding tax:
- 12.8%: standard rate (final withholding)
- Reduced treaty rate: if your country of residence has a treaty with France (often 5-15%)
- 0%: for intra-group EU participations (Parent-Subsidiary Directive)
📈 French capital gains
Capital gains on the sale of French participations are taxable in France for non-residents if you have held more than 25% of the capital at any time in the 5 years preceding the sale:
- 12.8%: PFU under domestic law (+ 7.2% social levies if EU/EEA treaty)
- 19%: rate applicable to non-EU non-residents (under domestic law)
- Exempt: if participation < 25% AND the treaty allocates taxation to the country of residence
🏦 French life insurance
Non-residents can keep their French life insurance. Key points:
- No CSG/CRDS on withdrawals for non-residents outside the EEA
- Final withholding tax on withdrawals based on contract age (7.5% after 8 years)
- Some countries tax withdrawals locally, leading to double taxation without a treaty
- PER (Retirement Savings Plan) can be maintained but contributions are no longer deductible
🔄 CRS & FATCA: automatic exchange
France and 110+ countries participate in the OECD's Common Reporting Standard (CRS). Your foreign bank automatically transmits to French tax authorities each year:
- Balances of your foreign bank accounts
- Capital income (dividends, interest, capital gains)
- Life insurance surrender values
French real estate from abroad
Keeping real estate in France after your departure is often poorly understood from a tax perspective. Here are the precise rules.
🏘️ Rental income
Rental income from properties located in France is always taxable in France (source taxation), even if you are a non-resident. Rates:
- Minimum rate 20% (or progressive scale if more favorable)
- + Social levies: 7.5% if EU/EEA/Swiss resident affiliated to a local social security scheme; otherwise 17.2%
- Deductibility of expenses identical to residents (loan interest, works, property tax...)
Furnished rentals (LMP/LMNP):
- Same minimum 20% rate for French-source business income
- LMP status requires registration with the French trade register
- Accounting depreciation still applies
- Note: since 2023, LMNP losses can no longer be offset against total income for non-residents
📈 Real estate capital gains
Capital gains on the sale of property located in France are taxable in France, regardless of your country of residence.
| Situation | Income tax rate | Social levies | Additional tax |
|---|---|---|---|
| Non-resident EU/EEA (with treaty) | 19% | 7.5% | 2-6% if gain > EUR 50,000 |
| Non-resident outside EU/EEA (with treaty) | 19% | 17.2% | 2-6% if gain > EUR 50,000 |
| Non-resident non-cooperative state (ETNC) | 75% | 17.2% | - |
Holding period allowances apply identically: full income tax exemption after 22 years, social levies after 30 years. The primary residence sold within 2 years of leaving France benefits from a partial exemption up to EUR 150,000 in capital gains.
🏛️ IFI (Real Estate Wealth Tax) for non-residents
As a French non-resident, you are subject to the IFI only on your real estate assets located in France (not on your worldwide wealth).
- Threshold: EUR 1,300,000 of net real estate wealth in France
- Rate: 0.5% to 1.5% progressive (above EUR 800,000)
- Shares of French SCIs included in the tax base
- Excluded: your primary residence abroad, your foreign real estate
Non-resident strategies:
- Holding through a corporate-taxed SCI (shares may be exempt from IFI as professional assets... under certain conditions)
- Debt financing: real estate debt is deductible from the IFI
- Bare ownership split (bare ownership only)
Filing obligations for expats
Leaving France for tax purposes does not exempt you from all filing obligations. Here is what you still need to declare in France.
Declaration of French-source income (non-residents)
To be filed if you receive French-source income: rental income, salary from a French company, dividends not already covered by withholding, pensions...
Filed online at impots.gouv.fr, to the Non-Resident Tax Service (SIPNR), same calendar as the standard return.
Declaration of foreign bank accounts, life insurance and crypto assets
Mandatory for every French tax resident who holds or uses a bank account, life insurance contract, or crypto asset account opened outside France. To be attached to your annual tax return.
Declaration of foreign-source income
If you remain a French tax resident (dual residency or mid-year departure), you must declare your foreign-source income on this form in addition to form 2042.
Once confirmed as a non-resident, this form no longer applies to your foreign income; only your French-source income goes on form 2042 NR.
Exit tax declaration
To be filed within 30 days of your transfer of tax domicile if you are subject to the exit tax (participations > EUR 800,000 or > 50%). Includes the application for payment deferral if applicable.
Annual exit tax follow-up (if deferred)
As long as you benefit from a payment deferral on your exit tax, you must file an annual follow-up declaration confirming that the securities have not been sold and that you remain a non-resident.
📅 Annual filing calendar for expats
| Period | Obligation | Form | Recipient |
|---|---|---|---|
| January - March | Declaration of foreign accounts opened/modified during the year (in-year) | 3916 online | Tax office via impots.gouv.fr |
| April - May | Income tax return (deadline varies each year) | 2042 NR + 3916 + 2074-ETD bis | Non-Resident Tax Service |
| September | Payment of French income tax balance (if French-source income) | Tax notice | Public Treasury |
| June 15 | IFI declaration (if French real estate wealth > EUR 1.3M) | 2042-IFI | Non-Resident Tax Service |
| Within 30 days of departure | Exit tax declaration (if applicable) | 2074-ETD | Tax office of last French domicile |
Ready to optimize your taxes?
Choose your expatriation destination based on your tax priorities, or browse our detailed country guides.
⚖️ Disclaimer: The tax information presented on this page is of a general informative nature and is based on legislation in force as of April 2026. It does not constitute personalized legal or tax advice. Each tax situation is unique and may be affected by bilateral treaties, anti-abuse rules, or recent legislative changes. Before making any significant tax decision, consult a tax lawyer or accountant specialized in expatriation. Sources: BOFIP, PwC Worldwide Tax Summaries, EY Worldwide Tax Guide, KPMG Tax Guides.