Wealth Engineering & Non-Residents: Key Reflexes for the 2026 Filing Campaign

First check: are you really a non-resident for tax purposes?

Non-resident status does not simply follow from moving abroad. Under domestic law, it is determined by Article 4 B of the French Tax Code, which sets out three alternative criteria for connection to France. A French tax resident is a person whose home or main place of stay is in France, or who carries out their main professional activity there, or whose centre of economic interests is located there. Meeting any one of these criteria is sufficient to establish French tax residency — regardless of nationality or address declared abroad.

This domestic framework may then be corrected by bilateral tax treaties binding France and the taxpayer's state of residence. France has signed nearly 180 tax treaties, which, in the event of a residency conflict, set out a hierarchy of tie-breaker criteria (permanent home, centre of vital interests, habitual abode, nationality). Verification is essential, in particular in cases of recent international mobility, management of a French company from abroad, or holding of real-estate assets in France.

A misqualification carries symmetrical consequences: a taxpayer who is in fact a French tax resident without realising it is subject to worldwide tax obligations and exposed to substantial reassessments. Conversely, a non-resident who wrongly declares themselves as a foreign resident may lose the benefit of favourable treaties.

What you must declare in France

Non-residents are subject to a limited tax obligation: they only declare in France their French-source income, or income that the treaties allocate to France. The main relevant categories are as follows.

Real-estate income from properties located in France — rents, income from French SCIs or SCPIs. It must be declared on form 2044 under the standard regime, or directly on form 2042-NR under the micro-foncier regime. Real-estate capital gains on assets located in France remain taxable in France for the non-resident, with withholding at source carried out by the notary at the time of sale.

Pensions paid by French institutions are, depending on the treaty, taxable exclusively in France, in the state of residence, or shared between the two. A treaty-by-treaty review is essential.

Dividends and interest from French sources are subject to withholding tax at the rate set by domestic law (12.8% for dividends) or reduced by treaty. Withholding does not always exempt from the French filing obligation. The main return is filed on form 2042-NR. It is supplemented, depending on the case, by form 2041-TM (average rate option), form 2044 (real-estate income, standard regime) or form 2074 (capital gains on securities).

The applicable rate: do not overlook the average rate option

Non-residents are subject to a minimum tax rate, which acts as a floor on their French taxation regardless of the progressive scale. In 2026: 20% up to €29,579 of French-source income, and 30% above. This mechanism can lead to taxation significantly higher than that of a resident with comparable income.

The average rate option consists of applying the progressive scale to all worldwide income, then proportionally allocating the resulting tax to the income taxable in France only. This rate is automatically applied if more favourable. The option requires worldwide income to be declared on form 2041-TM — a step many taxpayers hesitate to take, even though it can significantly reduce the tax burden, particularly for those with low foreign income.

Specific points of caution for the 2026 campaign

LMNP: a change to monitor. The 2026 Finance Act extends to non-residents the inclusion of foreign income in determining LMP (professional furnished landlord) status. From 2026 income onwards, foreign rental income will be added to French LMNP income to assess the qualifying thresholds. For non-residents operating a mixed Franco-foreign property portfolio, this reform may alter their status as early as the next campaign.

Exit Tax: do not lose sight of declarative obligations. Persons who transferred their tax domicile out of France since 3 March 2011 may be liable for the Exit Tax (Article 167 bis of the French Tax Code) on unrealised capital gains assessed at the time of departure. The deferral of payment is conditional on annual declarative obligations being met (forms 2074-ETD / 2074-ETS). Failure to file may cause forfeiture of the deferral and immediate payment of the tax.

Foreign accounts and contracts. Any French tax resident holding a bank account abroad must declare it via box 3916 of their return, on pain of a €1,500 fine per undeclared account (€10,000 for accounts in non-cooperative states). The same obligation applies to life-insurance contracts taken out with foreign institutions.

Social levies: check your affiliation. French-source real-estate income received by non-residents is in principle subject to social levies at 17.2%. However, persons affiliated to a social-security regime in an EEA state or in Switzerland are subject only to the solidarity levy of 7.5%. This exemption must be expressly requested and supported by a certificate from the foreign social-security institution.

2026 filing calendar — non-residents

Non-resident taxation is not a lighter form of taxation: it is a variable-geometry tax framework whose parameters — tax residency, nature of income, applicable treaties, declarative options — interact in sometimes counter-intuitive ways. The filing campaign is the right moment to take stock of one's overall situation: confirming that tax residency is correctly qualified, ensuring that all declarative obligations are met, and identifying available optimisations — average rate option, social-levy exemptions, bilateral treaties. One hour of advance counsel is worth several years of reassessment.

Your non-resident situation is unique. Our Tax & Wealth Department supports you across all your declarative obligations and in structuring your French assets.