I moved to Paris less than a year ago and am very confused about the fiscal residency / tax rules that may apply to me. I have consulted with 3 accountants and neither of them know the right answer because in my situation it could be a bit tricky.

I am an Indian citizen - living in France on a resident permit which is renewable yearly, basically I moved on the basis of being able to prove "independent means of income" and initially moved on a long stay visitor visa which is in the process of being converted to a carte de sejour currently. All my income and economic interests are currently in India and basically I earn my income from rents on properties I own and some interest I receive on bank deposits. I do not run or manage any business from France and all my income / assets in India were settled before I moved to France. ALso I only have a permanent home in India right now and live in temporary rented apartments in Paris however I might be buying a permanent home in France too.

As per the tax treaty between India and France - if a person has permanent homes in both countries then their fiscal residence will be in the country of their most vital and economic interests....which I think is India as I have no business or income in France currently...but I need someone to confirm this. Is it possible even if I am spending more than 183 days a year in France - I can still remain fiscally resident in India because all my income is passive income and sourced from India only. I am paying all my taxes in India. If I can remain fiscally resident in India then at what point does this change? If I decided to settle down in France forever and just kept my income out of India mainly then can I remain fiscal resident in India forever? What if I invest in some business / properties in France and create a french income too - but my income in India is still much more than France then also am I still fiscal resident in India?

I hope someone here can answer my questions.

Thanks a lot.

 

What you say about 183 day rule is not correct at all - this is the STANDARD which is further dependent on each country wide tax-treaty that France has signed with other countries. This is why I have been confused and even accountants I paid in France to get advise are confused about it. Please read this part of the Indo-French tax treaty which talks about establishment of fiscal residency

If you read above even if I have permanent homes in both countries I will be fiscally resident only in the country where my personal and economic relations are closer...the 183 rule is not the only criteria - and this is what I thought also before that staying 183 days or buying a property in france makes me fiscally resident in france but apparently it doesn't and I am not sure anyway - need someone to confirm it.

Yes I am thinking of moving to Belgium too - and if the tax laws are better there then why not? I heard that "unearned" or "passive" overseas income is not at all taxed in Belgium. However I prefer to stay in France and it all depends on how I am taxed in France. I already have the resident visa for France - it's the long stay visitor visa which I obtained by proving enough personal resources to live on but I had no Idea I would have to deal with taxation issues because even when I applied for the visa the consulate never mentioned anything about being tax resident in France....this visa has no benefits - we have to get private health insurance and pay for everything, there is no right to work and no state benefits at all.

 

http://www.frenchentree.com/fe-legal/di ... p?id=15003

please read that article if you can - it explains why the 183 day rule means nothing really - it all depends on the treaty rules between countries. As per Indian tax laws - I am fiscal resident in India even if I live outside India forever - this is where the double tax treaty tie breaker rules come in. Income that arises out of India is taxed in India making me fiscal resident in India so as per the treaty I should not bother with french taxes?? I just need a professional to confirm this now.

 

Let me ask you another question - suppose I do want to change my fiscal residence to France and pay taxes in France eventually then can you tell me how the following will be taxed -

1) Property rental income in India.
2) Interest income in India.
3) Capital gains in future when they arise in India.

How does all this work if I am already supposed to pay 33% tax in India on all the income above? I should at least get a tax credit on the taxes I am paying in India so how much more would i need to pay in France exactly? If all my income is from the above sources in India then do I need to pay any social charges in France at all? Also if I moved to Belgium how much would I save in taxes exactly compared to France?

I don't think I am fiscally resident in France yet - but in 2-3 years it might change because by then I would have spent considerable time in France and built a social life.

Thanks a lot!!!

 

Thanks yes i will contact the tax office directly think its better.

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