how to determine the tax residence of a taxpayer

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THEBilateral tax treaties help prevent double taxation of people living in two countries at the same time. When these persons are subject to tax in these two States, the convention makes it possible to determine their real tax “residence”, as the following case recalls.

In 2012, M. and Mme X, who stay alternately in France and Switzerland, and who pay their taxes in Switzerland, are subject to a tax audit in France. The administration considers that, from 2007 to 2011, they should have declared their income in France. It reintegrates into their tax bases the sums entered in the bank accounts they hold in Switzerland, as well as their retirement pensions and income from movable capital. It taxes them automatically and imposes a fine on them.

Fiscal address

The X contest these operations, without success, with the administration. In June 2015, they seized administrative justice; they claim that they were not tax residents in France, either within the meaning of Tax Code, or within the meaning of convention of September 9, 1966, concluded between Switzerland and France with a view to eliminating double taxation. They ensure that their tax residence was in Switzerland.

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When the “Tax judge »Examines a dispute of this kind, he must first check whether, “With regard to domestic law”, the imposition was “Validly established”, i.e. if the person has a ” fiscal address “ in France. The administrative court of appeal de Lyon therefore recalls, on April 11, 2019, that under article 4 B of the general tax code “Are considered to have their tax domicile in France: a. people who have their home or the place of their main stay in France… ”

She recalls that ” the hearth gets along of the place where the taxpayer normally lives and has the center of his family interests, without taking into account stays temporarily made elsewhere due to the needs of the profession or exceptional circumstances ”.

Water bills

In this case, notes the administrative jurisdiction, about the wife, ” during the litigious years, Mme X resided in France, in Sainte-Foy-lès-Lyon [Rhône], in a building where she [était] the usufructuary “, and whose property was owned by his children. She deduces that Mme X “Had his home in France”.

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