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TonyTax
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Need advise from an expert in the UK/France Tax Treaty. That

Customer Question

Need advise from an expert in the UK/France Tax Treaty.
That said - the help required is in the interpretation of Clause 15.
BACKGROUND
I am a resident of France.
I work in the UK for an UK firm.
I spend more than 183 days per year in the UK(usually the working week) - Friday and weekends in France.
QUESTION(S)
1) Is it possible to be liable for taxes in the two states concerned
2) I pay taxes in the U.K. - can France impose any taxes given my background?
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.

Hi.

Can you confirm that you are a British national please. Do you have a home in the UK?

Customer: replied 3 years ago.

I am a resident and Citizen of France.


No, I do not have a home in the U.K.

Expert:  TonyTax replied 3 years ago.
Thanks.

Leave this with me while I draft my answer.
Expert:  TonyTax replied 3 years ago.

Hi again.

The UK/France tax treaty is here.

The wording in many tax treaties is the same. Take a look at INTM153170 here for a breakdown of Article 15 of the France/UK double tax treaty. Unless you spend less than 183 days in the UK and your employer is not a UK resident employer or the UK base of a non-UK employer, you will be resident in the UK for tax purposes and your earnings will be taxable in the UK. Take a look at pages 5 and 6 of the document here which explains the automatic tests of UK residence or non-residence for tax purposes. Since you spend at least 183 days in the UK I would say that you are UK resident for tax purposes.

If you are tax resident in France then you will almost certainly be taxable on the UK earnings there but if that is the case, then the UK tax will be allowed as a credit against any tax liability you have in France under the terms of the tax treaty.

It is possible to be resident in more than one country for tax purposes because of the way that different countries define tax residence. As you will learn from reading the notes here and here, French tax residency is not necessarily dependent on spending at least 183 days in France in a tax year. It takes into account where your home is, where your family is amongst other criteria. You ought to seek some advice locally as to your French tax status which will determine whether you will have to pay French tax on your UK earnings.

Where you are deemed to be resident in both countries, there is a tiebreaker in the tax treaty under Article 4 of the tax treaty. The tests of tax residence are explained in plain English here. If these tests do not establish your true tax residence, then the matter will be decided by the respective tax authorities of France and the UK. That is, if you actually decide to challenge your tax residency status in France or the UK if you are deemed to be resident in both for tax purposes. If the tiebreaker established that you were resident in France the UK earnings would still be taxable in the UK but non-UK source income would not. This would be academic if you are not a British national and do not have £2,000 or more of non-UK source income or gains per tax year that isn't remitted to the UK.

I hope this helps but let me know if you have any further questions.

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