TLDR: If you are a digital nomad, you only pay taxes in France if you are a tax resident. Residency is determined by specific criteria: staying for more than 6 months, having your main economic interests or primary activity in France, or having your family permanently residing there. If you are not a resident, you only pay taxes on income sourced in France. Tax treaties with other countries may exclude taxation in France, provided you are a tax resident in the partner state and do not have a fixed base in France.
Tax Residency in France
You are considered a French tax resident if:
- You stay in France for more than 6 months per year, even in temporary accommodations like hotels or Airbnb.
- Your family (spouse or minor children) permanently resides in France.
- The center of your economic interests is in France, meaning most of your worldwide income comes from activities carried out in France.
- Your primary activity, in terms of time spent or income generated, is conducted in France.
Taxable Income in France for Non-Residents
If you are not a tax resident in France, you are only required to pay taxes on income sourced in France, including:
- Income from a fixed professional base in France, such as an office or rented premises used for your business.
- Property income, such as rent from properties located in France.
- Income from occasional profit-making activities, such as sales on online platforms targeting French customers.
Bilateral Tax Treaties
Tax treaties with countries like Portugal or Ireland may exclude taxation in France for income from self-employment, provided that:
- You do not have a fixed base in France.
- You are effectively a tax resident in the partner state, as evidenced by a tax residency certificate issued by the local authorities.
Required Documentation
To prove your tax residency or lack thereof, it is essential to keep documents such as:
- Passport stamps, flight tickets, and foreign rental agreements to prove the duration of your stays.
- Bank statements and contracts with foreign clients to demonstrate that the center of your economic interests is not in France.
- Foreign office rental agreements to prove the absence of a fixed base in France.
Risks and Specific Exceptions
One of the main risks for digital nomads is double taxation, which occurs when two states consider you a tax resident. In such cases, bilateral tax treaties establish precedence criteria to determine which country has the right to tax you. Another risk concerns activities on online platforms: if the French tax authorities suspect VAT evasion, they can report your account to the platform, which is required to suspend you within one month of notification, with no direct appeal possible.
French Civil Servants Abroad
French civil servants working abroad remain tax residents in France unless they are taxed locally on all their income.