Doing Business in France - RSM International

4.6 Taxation of individuals
4.6.1 Personal income tax
This tax applies to each family unit and is progressive.
The taxable period is the calendar year. The overall income received during a civil
year must be declared in the following year (assessment year) in a detailed tax return
covering each type of income. The amount of tax payable is assessed by the Tax
Authorities, which issue a tax bill (avis d’imposition).
4.6.1.1 Taxable persons: notion of residence for tax purposes
French tax law provides that a person, regardless of nationality, will be regarded as
resident in France for the purpose of income tax if any of the personal, professional
or financial criteria is met. Whenever an individual fulfils anyone of the three criteria,
he will be deemed to be resident in France and all his incomes, wherever they come
from, will be taxed in France. In order to avoid double taxation, a tax treaty, if it exists,
may be applied.
Personal criteria
An individual with a family and/or principal place of residence in France will be a
French tax resident.
Professional criteria
An individual who carries on a trade, business or profession in France is regarded as
resident in France for tax purposes, unless he can demonstrate that this activity is
only ancillary.
Economic and financial criteria
An individual having the centre of his economic interests in France will be deemed to
be resident in France. This will be the case if France is the place where the individual
has made major investments, has a main office or effective place of management, or
derives most of his income.
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