Settling in Switzerland as a tax resident, or returning to live in France after expatriation: in both cases, transferring tax residence is more than just moving house. The legal criteria are precise, the tax risks numerous, and the process is strictly governed by international treaties. Here are the essential rules you need to know to secure this change of status.
What is a change of tax residence?
A taxpayer is considered to be a tax resident of a country according to a set of criteria defined by national legislation and tax treaties. In France, the criteria are as follows:
– home or main place of residence,
– place of gainful employment,
– center of economic interests.
In Switzerland, tax residence depends on the place of residence or stay of more than 30 days with gainful employment, or of more than 90 days without gainful employment.
Changing tax residence means no longer fulfilling the residence criteria in the country of departure, and fulfilling them exclusively in the host country. The main risk is that of dual tax residence, and therefore double taxation.
The role of the Franco-Swiss tax treaty
The September 9, 1966 tax treaty between France and Switzerland helps avoid double taxation. In the case of dual residence, it establishes a hierarchy of residence criteria:
1. Permanent place of residence,
2. Center of vital interests,
3. Place of habitual residence,
4. Nationality.
It can also be used to allocate tax rights according to type of income (property income, dividends, salaries, pensions, etc.) and to provide for tax credits or cross-exemptions. However, it does not replace a declaration of departure or actual proof of transfer of residence.
Risks in the event of a poorly secured transfer
Changing tax residence without preparing the transfer in detail can lead to numerous complications:
- Double taxation: if both countries consider you to be a tax resident.
- Tax reassessment in France for non-compliance with reporting obligations (form 2042-NR, declaration of French-source income, etc.).
- Tax domicile dispute: transfer requalified as fictitious, with retroactive taxation in France.
- Taxation of unrealized capital gains (exit tax) for certain taxpayers leaving France with substantial assets.
Best practices for secure transfers
A transfer of residence must be documented, consistent and justified. It is recommended to :
– leave your home in France (lease termination or sale);
– transfer your personal and professional life (family, job, bank, insurance, etc.);
– deregister from French organizations (social security, pension fund);
– inform the tax authorities using the departure form (2042-NR);
– register in Switzerland (residence permit, work permit if applicable);
– keep concrete proof of the change (lease, contracts, invoices, etc.).).
A prior tax analysis can also help to anticipate the consequences of French-source income or assets held in the country of departure.
Changing tax residence: our expertise
BERGEOT PAOLI Associés assists taxpayers when they leave for Switzerland or return to France. We analyze your personal and financial situation, identify the risks of double taxation or requalification, and help you ensure compliance.
Our services also include assessment of tax implications, management of pre- and post-expatriation reporting obligations, coordination with other advisors (banks, notaries, Swiss tax specialists) and assistance in the event of audits or litigation. Find out more about our expatriation and impatriation services