Does western european countries (out of UK) have the ability to tax you when you

[Bill D]

Hi, I was wondering if France, can domicile your tax residence there, if you are respectively french, in case you are a digital nomad without triggering the tax residence criteria in any country in the world (including France itself) ?
It's not very clear, some people say you actually need to show you are resident somewhere else, but I cannot find in the texts.
as an hypothesis : the taxpayer has not any economic tie, and do not spend time in France

 

[Golden Fleece]

It's not very clear, some people say you actually need to show you are resident somewhere else, but I cannot find in the texts.
as an hypothesis : the taxpayer has not any economic tie, and do not spend time in France

Today, the tax codes of most European nations work that way (to avoid losing too many of their tax slaves).

• In the absence of any other deciding criteria among the above (primary place of residence or no place of residence in either country), your tax residence will be in France if you hold French nationality.

Determination of tax residency in France - Welcome to France

Find all the important information about Determination of tax residency thanks to Welcome to France numerous sheets dedicated to foreign talents thinking of settling in France

www.welcometofrance.com

 

[Bill D]

• ""In the absence of any other deciding criteria among the above (primary place of residence or no place of residence in either country), your tax residence will be in France if you hold French nationality.""

Actually, the sense of "no place of residence in either country" here means no adress in either country, it is not meaning that you need to be tax resident in the other country (in this exact sentence).
And it seems this site is formulating in a strange way, the points number 2-3 and 4 are under the hypothesis of a dual tax residence

It's not really clear, most government site explain it differently : https://www.oecd.org/tax/automatic-...stance/tax-residency/France-Tax-Residency.pdf

saying if you do not trigger any of the three points (place of living, work, economic tie) you are simply not french tax resident, and I don't see the condition "you should trigger the tax residency somewhere else"

 

[Bill D]

Today, the tax codes of most European nations work that way (to avoid losing too many of their tax slaves).

Determination of tax residency in France - Welcome to France

Find all the important information about Determination of tax residency thanks to Welcome to France numerous sheets dedicated to foreign talents thinking of settling in France

www.welcometofrance.com

"
Internal law

In France, subject to international tax treaties, you are considered to be domiciled for tax purposes in France, if you meet one of these 3 criteria:

if your household (spouse, partner of a PACS or children) or your tax domicile (main residence) remains in France even if you are staying abroad temporarily or for a longer period
if your main activity is in France (in the event of multiple activities, this is the one which mobilizes the most effective time or which creates the bulk of your income)
if the center of your economic interests is located in France (place of business, administration of property or location of main investments).
Note that the tax residence situation is assessed on an individual basis for each member of the household. Thus, if you are in a couple, it is possible that you will be considered as a tax resident and your spouse as a non-resident.

There are a number of special situations:

public officials serving abroad
employees posted abroad
border workers
so-called mixed couples."

Résidents à l’étranger, quelles règles pour votre impôt sur le revenu ?

Si vous êtes expatrié, les règles qui s'appliquent en matière d'impôt sur le revenu dépendent de votre résidence fiscale et des dispositions prévues par les conventions fiscales internationales. On fait le point.

www.economie.gouv.fr

in these three condition nowhere is written you must be deeemed tax resident somewhere else

 

[Golden Fleece]

• ""In the absence of any other deciding criteria among the above (primary place of residence or no place of residence in either country), your tax residence will be in France if you hold French nationality.""

Actually, the sense of "no place of residence in either country" here means no adress in either country, it is not meaning that you need to be tax resident in the other country (in this exact sentence).

It sounds as if we are in agreement. Unless you have established a residence elsewhere, then by default your tax residence remains in France if you hold French nationality. That is what I meant in my previous post.

So, as a French citizen you cannot simply be a nomad (perpetual tourist) without a residence anywhere.

 

[Sols]

A long time ago, it was doable to live as a perpetual traveler with no place to call tax home.

Nowadays, if you are going for this lifestyle, establish tax residence somewhere easy and favourable such as Cyprus, Malta, UAE, Panama, Malaysia, or one of the many territories now offering digital nomad visas: Countries with Digital Nomad Visa

As an EU citizen wishing to do this, the easiest is Cyprus. Rent or buy a place there, stay at least 60 days per year in Cyprus, register as a resident, get a tax ID, and pay only the 2.65% (max 4,770 EUR/year) social security contribution. Other income can be structured to be tax free through various means. The main caveat is you can't also be tax resident anywhere else. As long as you aren't, Cyprus is happy to consider you tax resident after just 60 days.

Banks and other financial institutions need to know where you pay tax. If that's nowhere, they might throw you out or report to multiple jurisdictions that you have a connection with.

 

[ilpablo]

A long time ago, it was doable to live as a perpetual traveler with no place to call tax home.

Nowadays, if you are going for this lifestyle, establish tax residence somewhere easy and favourable such as Cyprus, Malta, UAE, Panama, Malaysia, or one of the many territories now offering digital nomad visas: Countries with Digital Nomad Visa

As an EU citizen wishing to do this, the easiest is Cyprus. Rent or buy a place there, stay at least 60 days per year in Cyprus, register as a resident, get a tax ID, and pay only the 2.65% (max 4,770 EUR/year) social security contribution. Other income can be structured to be tax free through various means. The main caveat is you can't also be tax resident anywhere else. As long as you aren't, Cyprus is happy to consider you tax resident after just 60 days.

Banks and other financial institutions need to know where you pay tax. If that's nowhere, they might throw you out or report to multiple jurisdictions that you have a connection with.

Hi, I was investigating about the Cyprus solution with local accountants, but it's not clear how can you get the residence with the 60 days rules, without opening a company there. If you own a company elsewhere they might question about it (POEM and CFC rules).

Also to get the tax residence permit you have to satisfy one of these 3 criteria, along to rent an apartment for 12 months (while using for 2).

- own a Cyprus resident company
- be the director or employee of a Cyprus resident company
- register as self employed (but then you should show some kind of income which is taxed much more)

Also I've been asked 4k to setup the company + personal residence + aorund 2/3k a year of accounting costs.

So based on this research, my initial idea to go with Cyprus got screwed up for the moment.

Do you know any workaround for this?

 

[Bill D]

A long time ago, it was doable to live as a perpetual traveler with no place to call tax home.

Nowadays, if you are going for this lifestyle, establish tax residence somewhere easy and favourable such as Cyprus, Malta, UAE, Panama, Malaysia, or one of the many territories now offering digital nomad visas: Countries with Digital Nomad Visa

As an EU citizen wishing to do this, the easiest is Cyprus. Rent or buy a place there, stay at least 60 days per year in Cyprus, register as a resident, get a tax ID, and pay only the 2.65% (max 4,770 EUR/year) social security contribution. Other income can be structured to be tax free through various means. The main caveat is you can't also be tax resident anywhere else. As long as you aren't, Cyprus is happy to consider you tax resident after just 60 days.

Banks and other financial institutions need to know where you pay tax. If that's nowhere, they might throw you out or report to multiple jurisdictions that you have a connection with.

Yeah I agree with it and it's a good avice in general, but my question was a different, in case you would fail to acquire the residence somewhere and that there is a risk this residence would be challenged, so the case of digital nomad was the best picture.


Wanted to make sure I cannot be considered tax resident there if I fail to match the tax residence condition in any other country, (some country do not deliver residence certificate, some country have uncertain rules, require salary or whatever) despite not having any tie to France.

Or if they could say, "which country is here to claim that you are their tax resident ? None ? then for us you are french tax resident"
But I do not find this condition in the text

 

[Sols]

Wanted to make sure I cannot be considered tax resident there if I fail to match the tax residence condition in any other country, (some country do not deliver residence certificate, some country have uncertain rules, require salary or whatever) despite not having any tie to France.

That's what residence in Cyprus would achieve, while at the same time being flexible enough to let travel 305 days/year, whereas others typically require 183 or so days of residence.

What I don't know is whether France would accept it as good enough proof that you are tax resident in a new jurisdiction. That's a question for a French lawyer/tax adviser. Generally speaking, if you sever ties with your home jurisdiction and set up a new residence in another country, you cease being tax resident. Sometimes there's a hangover period of a few months to a couple of years, though.

- own a Cyprus resident company

Yes, that is a requirement.

- be the director or employee of a Cyprus resident company

Correct.

- register as self employed (but then you should show some kind of income which is taxed much more)

You need to register as self employed for social insurance purposes but as far as I know, you don't need to pay yourself a salary. You can pay yourself dividends, which are not taxed other than social healthcare (2.65% max 4,770 EUR/year).

Also I've been asked 4k to setup the company + personal residence + aorund 2/3k a year of accounting costs.

That's quite normal.

So based on this research, my initial idea to go with Cyprus got screwed up for the moment.

Do you know any workaround for this?

It's possible that Cyprus isn't the best choice for you. Or, if you want to make Cyprus work in your case, you might need to reconsider your plans/structure a little bit.