It is estimated that around 2.5 million French people live abroad. Many retirees are in this situation. Their number has even doubled in the last ten years. Some of them leave France for a country with a more pleasant climate or because the cost of living is lower there. But what about their situation with regard to French taxation? It all depends in particular on whether the tax home of these expatriates is located in France or in their host country. What are the steps to take depending on the situation?
French nationals who leave and live abroad and whose tax household is located outside France must take special steps with the tax authorities in the year they leave France, as well as in subsequent years.
The year of their departure to live abroad, the declaration of their income in France does not change since these French people indicate to the tax services their resources for the previous year when they were still domiciled in France.
On the other hand, the year following their departure from France, these households must take different steps. Indeed, for that year, they must first declare the income they received the previous year, i.e. that of their departure for a foreign country, between 1 st January and the date of their departure. In addition, these French people must also indicate to the tax authorities all their income which is taxable in France and which they have received between their date of departure and December 31 of the year in which they left France to live abroad. .
These procedures can be carried out by post and sent to the tax department which was in charge of their file before their departure, or online in their personal space on the tax site (taxes.gouv.fr) by means of two different declarations :income statement n°2042 (income received from 1 st January until the date of departure from France) and the "Declaration of income - Departure abroad or return to France (form no. 2042-NR)" to declare income from French sources taxable in France since the date of departure until December 31 of the year of expatriation. In all cases, it is necessary to indicate their new address abroad and the date of their departure from France.
Once settled in a foreign country, these French people must nevertheless continue to pay taxes in France on their income received in their country of origin. This can be professional income, income from real estate, pensions, life annuities, etc.
But, as non-residents for tax purposes in France, they can no longer benefit from tax reductions and credits which apply only to tax households domiciled in France. In addition, these French people living abroad are taxed according to the progressive tax scale according to the following minimum rates:20% for incomes below €25,710 and 30% from €25,710.
French people who go to live abroad also have the possibility of maintaining their tax home in France.
In this case, like all households residing in France, they must continue to pay their income tax in France.
French people who go to live abroad and whose tax domicile is no longer in France nevertheless remain liable for certain types of tax in the years following their departure from France and throughout their stay in a foreign country.
They remain liable for real estate wealth tax (IFI), subject to international agreements that may be signed between France and certain countries, if these French people who have gone abroad have real estate assets in France. worth more than 1.3 million euros.
In the same way, French people who live abroad but who have real estate in France must continue to pay local taxes, such as the property tax, the housing tax, or the tax on vacant housing which attached to it, in France.