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Retirees and tax residence

Many retirees are considering, after a hard life of work, moving abroad.


Even if taxation should not always guide one's choices, it is true that it is sometimes among the criteria allowing one to decide on one's country of expatriation (in this regard , Portugal or Greece, for example, can be interesting countries for retirees).

However, even when moving abroad, a retiree can, in certain cases, continue to be considered a French tax resident.

The criterion of the center of economic interests, the main source of attachment to France for a retiree

Indeed, as we explained to you in our article entitled “how to become a non-resident for French tax , one of the criteria allowing the tax administration to qualify a taxpayer of French tax resident is that of thecenter of economic interests.

However, this criterion sometimes involves having to compare the level of income that a taxpayer derives from France and that which he derives from abroad. When a retiree only receives a pension from a French source, he is then generally considered to have his center of economic interests in France.

This implies that the French tax administration will continue to consider this taxpayer as a French tax resident even though he would be considered a tax resident of his country of expatriation.

Will this taxpayer still be considered a French tax resident?

No, because fortunately, France has concluded tax conventions with many countries aimed at eliminating double taxation.

Tax treaties may allow retirees to no longer be considered French tax residents

These conventions generally make it possible to resolve tax residence conflicts when a taxpayer is considered both a French tax resident and a tax resident of their country of expatriation.

Generally, these conventions make it possible to consider the retired taxpayer as a tax resident of his country of expatriation (in particular by virtue of the permanent home and of the center of vital interests).

This does not necessarily mean that France cannot withhold tax on retirement pension payments. A case-by-case study will be necessary. Such withholding may then possibly, under tax treaties, benefit from a tax credit in the country of expatriation to minimize double taxation.

On the other hand, when a retired taxpayer expatriates to a country that has not concluded a tax treaty with France, the risk remains that this taxpayer is considered both as a French tax resident and as a tax resident of his country of expatriation (thereby incurring the risk of double taxation).

This is how a retired taxpayer resident in Cambodia was considered a tax resident on this basis. The Council of State in fact ruled that this taxpayer had his center of economic interests in France to the extent that the retirement pension constituted the only source of his income (Council of State, June 17, 2015, n°371412).

The particularity of the case meant that this retiree, however, had an interest in being considered as a French tax resident rather than a non-resident.

Similarly, the Administrative Court of Appeal of Bordeaux ruled that a taxpayer who claims to be domiciled in Senegal but who does not have income from Senegalese sources and whose Retirement pensions come 75% from the French pension system and are paid into a French bank account at one's tax residence in France (CAA Bordeaux, April 11, 2017, n°15BX2015). In this case, a tax convention had indeed been concluded with Senegal but it was insufficient to consider the taxpayer as a non-French tax resident

Me Nicolas Rozenbaum is at your disposal for any questions relating to your tax expatriation. Do not hesitate to request it directly by clicking here< /u>.

Please note that this information, up to date as of September 12, 2023, has been voluntarily simplified and summarized for educational purposes and does not constitute legal advice.

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