For a cross-border public sector worker, confusion between these two concepts can be costly. It is important to distinguish between them in order to avoid tax errors, such as double taxation. Moreover, understanding one’s administrative residence can help optimize one’s tax situation, as it may affect the reimbursement of professional expenses.

Tax residence is the legal link that connects an individual to a State for the purpose of determining taxation. By contrast, administrative residence refers to the location of a public employee’s main place of assignment.

Tax residence

This is the criterion that determines in which State you are taxable. Even if you work abroad, the French tax authorities consider that your tax domicile is located in France if you meet one of the following criteria:

A household in France
Your tax domicile is in France if your habitual household residence is in this country. The tax authorities consider, within your household, your spouse (married, in a civil partnership, or cohabiting partner) and your children.

France is your main place of work or the center of your economic interests
Your tax domicile is France if you carry out your main activity there. This is the activity to which you devote the most actual time or the one that provides the majority of your income. In the event that you have several activities, it is the main activity that is taken into account.

Furthermore, if France is the country in which you make your main investments, your tax domicile will be France.

Your main place of stay is in France
Your domicile is in France if it is the place of your habitual and main stay, that is to say if you stay there for 183 days (more than 6 months) during the year.

Important: these criteria are alternative. Meeting just one of them is sufficient to establish your tax domicile in France.
An international agreement concluded between France and a foreign country may provide for different rules. You can find all tax treaties concluded with France via: Les conventions internationales | impots.gouv.fr.

Administrative residence

Within the framework of the public service, the notion of administrative residence is often confused with personal domicile or place of taxation.

Administrative residence corresponds, by definition, to the territory of the municipality where, on a principal basis, the service in which the agent is assigned is located, or, when a management center or the National Center for Territorial Public Service ensures the handling of a civil servant, the headquarters of the management center or the headquarters of the regional or interdepartmental delegations of the National Center for Territorial Public Service.

Unlike tax residence, which determines the State competent for taxation, administrative residence corresponds exclusively to the place of professional assignment. It has no direct impact on the determination of tax.

However, it plays an essential role in determining the conditions for covering travel expenses.

If you make a journey between your home and your administrative residence, it is a commuting trip, in principle at your expense (with, where applicable, partial coverage depending on the applicable schemes).

On the other hand, a trip carried out for service needs outside your administrative residence may be classified as a mission, entitling you to reimbursement of expenses under the conditions provided for by the regulations.

Example:

You are a public agent residing in Metz and assigned to a service located in Luxembourg.

Your tax residence must be determined with regard to the criteria mentioned above and, where applicable, the Franco-Luxembourg tax treaty, which specifies which State is competent to tax your income and under what conditions double taxation is avoided. In some situations, you may still be required to file a tax return in France, in particular for the calculation of the effective tax rate.

Your administrative residence corresponds to the place of your main assignment, that is to say your service located in Luxembourg.

If you travel between your home (Metz) and your place of assignment, it is a commuting trip. However, if you are required, for service needs, to travel from your administrative residence to another distinct municipality, this trip may be classified as a mission and give entitlement to reimbursement, in accordance with the applicable rules.