Tax Non-Residents: The Trap of a Secondary Residence in France

Analysis of Recent Case Law and Practical Lessons in the Event of a Tax Audit

Declaring one’s tax residence abroad is not sufficient to avoid French taxation.

In recent years, the tax authorities have intensified audits targeting taxpayers who present themselves as non-residents, while maintaining significant ties in France.

A recent decision by the Paris Administrative Court of Appeal strongly illustrates this phenomenon. Taxpayers declaring to live in Dubai saw their foreign tax domicile challenged, with the authorities deeming their center of real life to remain in France.

The result: a particularly high tax reassessment.

This case law reiterates an essential reality: tax residence is assessed based on facts, and not solely on the taxpayer’s declarations.

The Decision Under Review: Factual Summary

In a judgment rendered on November 5, 2025 (CAA Paris, 2nd chamber, n° 24PA02106), the Paris Administrative Court of Appeal confirmed the tax authorities’ position of refusing tax domicile in Dubai for taxpayers claiming to reside there.

The tax authorities considered that these individuals were in fact leading a predominant personal, family, and economic life in France, despite the existence of documents attesting to an establishment abroad.

Elements Considered by the Tax Authorities and the Court

To characterize a French tax residence, the authorities and the Court considered a set of converging indicators, including:

• the signing of a lease in France, signed by a company represented by Mr., with receipts issued in his personal name;

• an electricity contract subscribed in France, with invoices addressed to family members;

• registration with French social security, accompanied by healthcare reimbursements to a French bank account, without a declared foreign address;

• a marriage celebrated in Paris during the audited period;

• social media posts revealing a luxurious and regular life in Paris;

• a company generating most of the income, managed by Mr., whose registered office was located in France;

• the lack of demonstration of equally strong personal and economic ties with Dubai.

These elements led the Court to consider that the center of personal and economic interests was located in France.

Arguments Put Forward by the Taxpayers

The taxpayers nevertheless maintained that they were tax residents of Dubai, by producing several supporting documents:

• a local residence certificate;

• the co-ownership, then rental, of an apartment in Dubai;

• the issuance of a foreign driving license;

• the subscription to a local health insurance.

The Court nevertheless considered that these elements, although real, were not sufficient to overturn the overall factual analysis, given that daily life and essential interests remained in France.

Tax Residence: What French Law States

Under domestic law, tax residence is defined by:

• the home or principal place of abode;

• the main professional activity;

• the center of economic interests.

It is sufficient for only one of these criteria to be met for French tax residence to be established.

Secondary Residence in France: A Major Risk Factor

Owning a secondary residence in France constitutes a factor of increased vigilance for non-residents.

In practice, this property can become a determining factor in a tax audit when its use exceeds a simple occasional stay.

The authorities analyze, in particular:

• the duration of actual presence;

• consumption (electricity, water);

• subscriptions and contracts entered into;

• the family and social environment.

A secondary residence used regularly can be assimilated to a home, with major tax consequences.

Practical Lessons for Tax Non-Residents

This decision recalls several essential principles:

• the consistency of evidence is crucial: administrative documents, personal life, professional activity, and public communication must be aligned;

• social networks are now fully integrated into audit tools;

• the mere possession of foreign documents is not sufficient in the event of a real life located in France;

• a tax audit can quickly evolve into complex tax litigation, with high financial stakes.

Tax Audit and Litigation: The Importance of Anticipation

Regarding tax non-residence, the intervention of a lawyer prior to the audit is often decisive.

The preliminary analysis of the situation allows for:

• identifying points of vulnerability;

• preparing relevant evidence;

• framing exchanges with the authorities;

• limiting the risk of reassessment or penalties.

For a comprehensive approach to these issues, please see our page dedicated to our support in tax audit and litigation.

Conclusion

Recent case law concerning tax non-residents confirms a clear trend: tax residence is assessed based on the reality of facts, and not solely on formal declarations.

In a context of reinforced audits, owning a secondary residence in France, combined with significant activity or presence in the territory, constitutes a major tax risk.

Rigorous legal analysis and tailored support are essential to secure one’s situation and, if necessary, effectively defend one’s rights against the authorities.