With an increasing number of people living and working across international borders, it is possible for couples to have mixed tax residency status.

Although there is a definition of 'tax resident' in French law, national law is subordinate to international laws and treaties to which France is party and different countries each have their own definition of legal residency.

This can mean that it is possible to have an entitlement to hold legal residency in more than one country. The terms of the relevant taxation treaty would then determine the basis on which you were taxed, in the absence of which France could impose its own rules.

National Law

The definition of 'domicile fiscal' in French tax law is enshrined in Article 4B of the Code Général des Impôts (CGI), where it gives a definition that is personal, professional and economic.

It states that you will be fiscally resident if your family lives in France, your main home is in France, you run a business, you are an employee in France, or France is the centre of your economic interests.

Specifically, Article 4B states that those who are resident are:

• Les personnes qui ont en France leur foyer ou le lieu de leur séjour principal ;
• Celles qui exercent en France une activité professionnelle, salariée ou non, à moins qu'elles ne justifient que cette activité y est exercée à titre accessoire ;
• Celles qui ont en France le centre de leurs intérêts économiques.

The regulations state that any one of these three criteria need apply for you to be fiscally resident in France, a position that was reaffirmed in a parliamentary response by the French Minister of Finance, stating: "Il s'agit de critères alternatifs et indépendants les uns des autres. Il suffit qu'un seul de ces critères soit rempli pour qu'un contribuable soit considéré comme domicilié fiscalement en France."

Where the husband and wife or both civil partners meet any of these criteria they will be assessed jointly for French tax.

However, the situation can become complicated where a spouse or civil partner does not meet any of these criteria, when the household can be assessed for French only on the income of the spouse or partner living in France and the French income of the other spouse or partner.

On this basis, and despite the Article 4B parameters, it is possible for one of the spouses to a marriage to be tax resident in France, whilst the other is non-resident. As the guidance from the French government states: "La situation du résident fiscal de France s'apprécie au niveau de chaque membre du foyer. Si vous êtes en couple, vous pouvez être considéré comme résident fiscal de France et votre conjoint comme non résident."

This is particularly the case where, for instance, the household income is generated from entirely outside of France, by a spouse who works and lives outside of France.

According to the regulations:

"Si l'un des époux ou partenaires ne répond pas à ces critères, l'obligation fiscale du ménage ne porte que sur :

- l'ensemble des revenus de l'époux ou du partenaire domicilié en France,

- les revenus de source française de l'autre époux ou partenaire (sous réserve des conventions internationales).

Néanmoins, bien que leurs revenus de source étrangère soient exclus de la base d'imposition, ces personnes doivent être prises en compte pour la détermination du quotient familial applicable."

However, the fact that the criteria adopted in determining residency in France are successive means that obtaining such mixed residency status is not readily available and would need to be determined on an individual basis. Not surprisingly, the tax authority are also predisposed to interpret the test in their favour.

We can consider each of the determining criteria in turn.

The 'foyer' is generally meant to refer to the place where the family resides, which permits the authorities to consider that someone who lives temporarily outside of France because of their work remains resident in France if it is the country where their family resides.

You will be resident in France if you live in France for at least six months of the year. This rule does not require that you live in a permanent home you have in France, but that you are merely on French soil for six months of the year.

However, the six-month rule is not absolute and there are circumstances, particularly in the case of business owners or professionals who may travel regularly, where even though they may have a home in France they may not be considered to be resident if they are frequently abroad.

In such cases, the French authorities and courts have been willing to review the circumstances for a longer period than a year in order to establish whether there is tax residency.

Conversely, even though you spent less than six months in France, you could also be resident if you spent more time in France than in any other country.

If you run a business or you are salaried employee in France, then you will be deemed to be fiscally resident.

If you have more than one business or employment in more than one country, then you will be considered to be resident in France if your main business or employment is located in France.

Your main business or employment need not necessarily be the one from which you generate most income, but the one where you spend most of your time.

There are particular regulations that govern cross-border workers (work in one country but live in another), notably those working in Switzerland, Germany and Belgium and more generally within the EEA.

The principal that applies in such cases is that income tax is payable in the country in which you earn your living, subject to the terms of any double taxation treaty. The rules are not always the same for social security rights and obligations.

There are also particular rules for EU nationals working temporarily in another EU country and we shall be looking more closely at cross-border working in a later article.

Particular rules also cover professional groups working across borders, such as diplomats, mariners, aircrew, and haulage drivers.

This is the place where you have your major investments, your place of business, from where you manage your assets.

Accordingly, if your main investments are held in France then it is possible you may be resident on this criterion alone.

The case law on this matter is quite complex, but it is clear that you would need to earn your main income from France for this rule to apply, particularly if you were non-resident on the basis of the other two criteria.

In the case of multiple activities or sources of income, the centre of economic interests of the taxpayer is in the country where the person derives most of its income.

International Law

Under Article 55 of the French Constitution, all national legislation is (formally at least!) subordinate to international treaties and laws to which France is party.

It is beyond the scope of this article to examine the range of international treaties and laws as they affect France.

However, a few words can be said about the position within the EEA, and the United Kingdom in particular, whilst it remains a member of the EEA.

There is very little law within the EEA concerning tax and residency, as Member States have been reluctant to agree to harmonisation of laws. The role of the EU really goes little beyond ensuring that there is no discrimination in the application of tax laws.

So there is no legal definition of 'tax resident' in EU law. The issue is only covered by Article 11 of the Implementing Regulation 987/2009, which lists a number of elements to determine the 'centre of interests' of the person concerned.

In relation to the United Kingdom the legal definition of 'residence' is less precise than that for France and has in recent years been made seriously complex under the 'Statutory Residence Test (SRT)' rules, requiring calculations and record keeping by individuals that in some cases is likely to make the SRT impossible to administer.

Broadly speaking, if you spend more than 183 days in the United Kingdom you are regarded are tax resident, but you can also be resident if you are resident for a shorter period.

Thus, you also likely to be ordinarily resident if, over a period of several years, your residence in the UK becomes part of the 'ordinary pattern of your life'. In particular, even if your visits to the UK tend to be relatively short and infrequent, if they average three months (91 days) or more in a tax year and you have a home in the UK and do not spend any great amount of time in a home elsewhere, then you may be considered to be UK resident.

There are also a host of other potential scenarios that are examined and catered for under the rules, which may well mean than in certain circumstances it is possible to be resident in both the UK and France.

Where there is a conflict between UK and French national laws, the Double Tax Convention 2008 sets out the steps for determining tax residency. They are very similar to those given in national law. It states:

'2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined in accordance with the following rules:

(a) he shall be deemed to be a resident only of the Contracting State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident only of the State with which his personal and economic relations are closer (centre of vital interests);

(b) if the Contracting State in which he has his centre of vital interests cannot be determined, or if he does not have a permanent home available to him in either State, he shall be deemed to be a resident only of the State in which he has an habitual abode;

(c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident only of the State of which he is a national;

(d) if he is a national of both Contracting States or of neither of them, the competent authorities of the States shall settle the question by mutual agreement.'

There is separate consideration in the tax treaty for settling the tax status of companies; the broad rule that applies is that the company shall be 'a resident of the Contracting State in which its place of effective management is situated.'

French Earned Income

Finally, it is worth stating that, whatever your residency status, you are required to pay tax and social charges on income arising within France.