The issue of tax residence remains one of the most sensitive for entrepreneurs and executives with high international mobility. In a context where more and more entrepreneurs choose to settle abroad — sometimes in attractive jurisdictions like Andorra — recent case law firmly reminds us that the tax residence certificate does not always protect against the risk of taxation in France.

On April 29, 2026, the Administrative Court of Appeal (CAA) of Lyon made a notable decision: it ruled that an Andorran tax residence certificate was not sufficient, on its own, to establish the taxpayer's tax residence in the Principality. This decision, which conflicts with recent case law from the Council of State, deserves particular attention from international executives.

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1. Understanding the concept of tax residence: a key issue for entrepreneurs

Tax residence determines in which country a person is taxable on all their income. Under French law, the criteria are set out in Article 4 B of the General Tax Code (CGI). A person is considered a resident of France if they:

have their home or principal place of stay in France;
carry out their main professional activity there;
or have the center of their economic interests there.

In other words, the residence certificate issued by another state is not automatically decisive: France concretely examines the taxpayer's situation. For entrepreneurs with international activities, holdings in several companies, or family interests in France, the boundary is often thin.

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2. The case of the CAA of Lyon: when the Andorran certificate does not convince

In the case judged on April 29, 2026 (n° 24LY00682), the taxpayer invoked their tax residence in Andorra, supported by a certificate issued by the Andorran administration. However, the French administration believed that their home and family interests remained located in France. The CAA of Lyon validated this analysis.

According to the Court, the taxpayer did not provide evidence that their home was indeed outside France, nor that they were subject to tax in Andorra due to their residence. The Andorran certificate, on its own, was not deemed sufficient.

This interpretation is particularly strict, as it requires the taxpayer to demonstrate effective taxation in the claimed state — here Andorra. This amounts to imposing an additional condition: not only proving a declared residence but also a fiscally active residence.

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3. A case law in tension with that of the Council of State

This positioning of the CAA of Lyon creates a legal tension with a decision from the Council of State on September 30, 2025 (n° 490793), rendered a few months earlier.

In this other case, the Council of State censured an administrative court of appeal that required, for a company resident in the Netherlands, proof of effective taxation in that state. It then ruled that the effective nature of tax liability was irrelevant for the application of the Franco-Dutch tax treaty.

Why this divergence? It seems to stem from the nature of the taxpayer and the scope of the tax treaty:

In the Dutch case, it involved a company and a treaty between EU member states.

In the Andorran case, the question concerned a natural person, and the Franco-Andorran treaty is more recent and less integrated into the community framework.

This contrast highlights a legal uncertainty: the residence certificate, even issued by the administration of a partner state, does not always constitute sufficient proof before French courts.

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4. The Andorran tax context: a determining element

To understand this caution, it is important to recall that Andorra only introduced personal income tax (IRPF) in 2015 (Llei 5/2014). Before this date, no taxpayer could claim to be subject to income tax, as this tax did not exist.

This explains why the CAA of Lyon could consider that an Andorran residence certificate, not accompanied by proof of taxation, did not establish the reality of tax liability. In other words, declared residence on paper was not sufficient to demonstrate a true "tax residence" in the conventional sense.

For executives or project leaders wishing to settle in low-tax jurisdictions, this decision serves as a reminder of a fundamental rule: a tax residence must translate into effective taxation, even if moderate.

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5. What practical implications for executives and entrepreneurs?

This case law has concrete consequences for mobile entrepreneurs and international start-ups:

1. Avoid ambiguous situations: maintaining an address in France, enrolling children in school there, or spending a significant part of the year can be enough to characterize French tax residence.

2. Document your situation: it is essential to keep probative elements — lease, invoices, local tax notices, employment contracts, evidence of daily life — demonstrating that the center of life is indeed abroad.

3. Analyze bilateral tax treaties: each treaty has its own criteria for "conventional residence." Support from an experienced tax lawyer helps secure this analysis.

4. Anticipate the burden of proof: in case of an audit, the taxpayer must demonstrate, with supporting documents, the reality of their residence abroad. A simple certificate will not suffice.

The main risk, in case of a discrepancy between the declared situation and reality, is a reclassification as a French tax resident and, consequently, taxation on all worldwide income.

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6. Increased vigilance in a context of international transparency

For several years, tax cooperation between states has significantly strengthened: automatic exchange of banking information, anti-abuse measures, modernized tax treaties. For international executives and investors, the leeway to "choose" their tax residence has diminished.

Tax jurisdictions, including France, are now attentive to the economic and family reality of the taxpayer. The message is clear: international taxation is not merely a matter of administrative formalities, but of concrete proof and overall coherence.

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Conclusion: anticipate and secure your international tax situation

In 2026, the issue of tax residence remains at the heart of many cross-border situations, and the decision of the CAA of Lyon is a strong illustration of this. It reminds us that settling abroad must be real, documented, and fiscally transparent.

For entrepreneurs, start-up leaders, or international investors, caution remains essential. Before any decision to expatriate or establish residence abroad, it is crucial to conduct a comprehensive analysis of one’s situation, assess the tax consequences, and verify the coherence of the documents produced.

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PRAX Avocats supports its clients on all issues of French taxation and international taxation, as well as in business law. On matters of social law, intellectual property, or complex contracts, the firm collaborates with trusted "Best Friends" firms.

Contacting our team will allow you to obtain a precise diagnosis and tailored support, based on legal rigor and a concrete understanding of your challenges.

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Tax residence: the Andorran certificate is no longer sufficient?