Transfer of residence abroad: what does "keeping your home in France" really mean?

The international mobility of entrepreneurs and executives is now an economic reality. Between remote work, cross-border investments, and development strategies abroad, many are wondering: what happens from a tax perspective when one moves to another country while maintaining strong ties with France?

A recent decision from the Paris Administrative Court of Appeal (October 20, 2025, No. 24PA00075) sheds interesting light on the notion of "tax domicile" when a household transfers its residence abroad but retains economic ties in France.

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Tax domicile, residence, and center of economic interests: three concepts not to be confused

International taxation is based on a simple principle but can sometimes be a source of confusion: a taxpayer can only have one tax domicile in one country at a time. This domicile depends on several criteria set by French domestic law and international tax treaties.

According to French domestic law

Article 4 B of the General Tax Code (CGI) states that an individual is fiscally domiciled in France when they meet one of the following three criteria:

they have their home or principal place of residence in France;

they carry out a main professional activity there;

they have the center of their economic interests there.

In other words, even if you live part of the year abroad, as long as your income primarily comes from France, or you maintain significant economic interests there, the French tax authorities will continue to consider you a tax resident in France.

According to international tax treaties

Bilateral treaties signed between France and many countries (notably Spain, the United Kingdom, the United States, etc.) aim to avoid double taxation.

They provide subsidiary criteria: permanent housing, center of vital interests, habitual place of residence… These concepts help determine when a person is considered a resident of both countries under their domestic law.

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The case judged by the CAA of Paris: a revealing concrete case

In the case of October 20, 2025, a couple had transferred their residence to Barcelona starting in 2014. Their son was enrolled in school there, and they had rented an apartment. However, their tax situation evolved from year to year, depending on the facts and evidence presented:

Year 2014: the couple stayed 183 days in France; their main residence thus remained in France. They are considered French tax residents, both under domestic law and the Franco-Spanish treaty. Result: tax reassessments were confirmed based on Article 155 A of the CGI, notably for IT services provided through a foreign company.

Year 2015: this time, stays in France were limited (about two days per month). The couple was no longer a resident of France according to the tax treaty. However, they retained in France the center of their economic interests — in other words, the main source of their income. The administration was therefore able to impose a penalty for failure to declare foreign bank accounts.

Year 2016: the situation stabilized, and the administration did not challenge the domicile in Spain. The couple thus benefited from a tax exemption based on Article 155 A of the CGI.

This case illustrates a reality: transferring residence abroad does not automatically lead to the transfer of tax domicile, especially if a significant part of the economic activity remains in France.

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Lessons for mobile entrepreneurs and executives

1. A departure abroad must be legally prepared

A simple lease abroad or enrolling a child outside France is not enough to prove the transfer of tax domicile.

Before departing, it is advisable to conduct an assessment of your personal and professional ties:

Where do you reside most often?
Where is your main activity located?
Where are your main investments and income located?

A prior analysis, conducted with a tax lawyer, helps anticipate the risks of double taxation and secure your situation.

2. Tax treaties do not eliminate all risks

Many entrepreneurs believe that an international tax treaty automatically protects them. In reality, these treaties only allocate taxing rights between states.

In case of doubt, the French administration can always examine whether the criteria of domestic law are still met and, if necessary, contest the declaration of non-residence.

3. Sanctions can be significant

Failing to declare a foreign bank account or income received through a foreign company exposes one to heavy penalties, even in the absence of intent to defraud. In the 2025 case, the automatic increase was applied for failure to declare and services billed from abroad, illustrating the rigor of the French tax administration on these points.

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How to secure a tax expatriation or international remote work?

The current economic context is prompting many entrepreneurs to consider a shared activity between several countries. To avoid unpleasant surprises, rigorous legal and tax support is essential.

Some best practices recommended by PRAX Avocats

Anticipate the transfer of tax residence, ideally before departure, with a complete legal and tax audit.

Document the situation precisely (leases, invoices, proof of income, school registrations, etc.) to prove the reality of the transfer of residence.

Identify reporting obligations: foreign accounts, owned companies, cross-border income flows.

Ensure consistency between your factual situation, your tax declarations, and the applicable treaties.

With a tailored approach combining business law, international tax law, and legal advice for businesses, PRAX Avocats supports executives and founders of start-ups in these complex processes.

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Conclusion: an issue of transparency and rigor

The case of October 20, 2025, confirms the constant vigilance of the French administration regarding mobility situations.

For entrepreneurs and investors engaged in cross-border activities, understanding the criteria for tax residence is essential to avoid adjustments.

At PRAX Avocats, we leverage our expertise in business law and corporate legal advice to assist executives and start-ups in securing their establishment choices and optimizing their expatriation strategies.

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For any questions regarding your international tax situation or a transfer of domicile abroad, please contact PRAX Avocats.