The Non-Resident Tax Directorate (DINR) this week released a fact sheet detailing the tax situation of people currently confined in France or abroad.
Will an extension of the containment period linked to the health crisis be likely to have an impact on the assessment of the criteria of tax residence for persons domiciled outside France who are prevented from returning home?
Article 4 B-1 of the General Tax Code defines the criteria for tax residency and stipulates that persons are considered to be tax-domiciled in France:
- who have their main home or stay in France, or
- who are engaged in a professional activity in France, whether employed or not, unless this is only an incidental activity, or
- those who have the centre of their economic interests in France.
This is subject to the possible contrary provisions in bilateral tax treaties.
With regard to the personal criteria of the main home or place of residence in France, the Council of State considered, in a judgment of 3 November 1995 (No. 126513), that the criteria of the main place of residence only applies in the event that the person does not have a home, defined as the usual place of residence of his family, and in any event, stays made temporarily elsewhere due to exceptional circumstances are not taken into account.
It was stated that "for the application of the provisions [.] section 4 B [.] the home refers to the place where the taxpayer normally lives and has the centre of his or her family interests, without taking into account stays made temporarily elsewhere due to the necessities of the profession or exceptional circumstances, and that the place of the taxpayer's primary residence can determine his or her tax domicile only if the taxpayer does not have a home. »
Thus, a temporary stay under confinement in France, or travel bans decided by the country of residence, is not likely to characterize a tax domicile in France under Article 4 B above.
In view of international conventions, it also appears that the fact that a person is temporarily detained in France because of a case of « force majeure” is not of a nature, for that reason alone, for them to be considered to have established their permanent home there or having the centre of their vital interests there.
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