As a non-resident, can I deduct expenses or claim tax reductions or tax credits when calculating my taxes ?

Generally speaking, non-residents cannot deduct expenses from their income or benefit from tax reductions or tax credits.

Principle

Tax reductions and tax credits only apply to people who are tax residents of France or considered “Schumacker” non-residents.

If you are an employee of the central government, a regional/local government or the hospital civil service and you are working abroad, you are considered a tax resident of France. You can deduct certain expenses from your overall income and claim tax reductions and credits the same as any other tax resident of France. (See also : I am a state, local authorities or public-sector hospital agent )

However, if you live abroad, there are certain expenses that cannot be claimed for tax credits.

For example, expenses incurred for personal services performed in your main residence abroad cannot be claimed for a tax credit. This type of expense can only be claimed if the services are provided in France (Article 199 sexdecies of the General Tax Code).

If you move abroad, you can deduct expenses and claim tax reductions and tax credits as a tax resident of France for the period from 1 January to the date of your departure.

As from your departure date and for the entire period you are a non-tax-resident of France, you cannot deduct expenses from your overall income or claim tax reductions or tax credits, with some exceptions.

Exceptions

• Pinel and Denormandie tax reduction

If you are a resident of France, you are eligible for a tax reduction if you make an eligible “Pinel” and "Denormandie" real estate investment, provided certain conditions are met.

Namely, as the owner of the property, you must commit to renting it out for at least six or nine years.

For investments made on or after 1 September 2014, the initial rental commitment may be extended. If you made a six-year commitment, it can be extended for a three-year rental period (which can be renewed once) ; if you made a nine-year commitment, it can be extended for a single three-year period. To extend the rental commitment, you must be a tax resident of France in the year of the extension.

Once you move abroad, you can only continue benefiting from the tax savings in a limited number of situations.

- If you made your investment on or before 31 December 2018 : while you’re abroad, the tax reduction cannot be applied to taxes owing on your income from French sources, and it cannot be deferred to a later year.

- If you become a tax resident of France again after your rental commitment period, you cannot carry forward any “unused” tax reductions to reduce your income tax in the following years.

- If you become a tax resident of France again during your rental commitment period, the tax reduction you can apply in each remaining year of your commitment period as from your return to France is either one-ninth, one-sixth or one-third of the total amount, as the case may be.

- If you made your investment on or after 1 January 2019 : if you were a tax resident of France at the time of your investment, you can continue to benefit from the Pinel and Denormandie tax reduction even after moving abroad and changing your tax residence.

• Technological risk prevention tax credit

You can claim a tax credit if, between 1 January 2010 and 31 December 2023, you incurred expenses for alterations to a residential property provided for under a Technological Risk Prevention Plan (PPRT) that were carried out before the plan was approved.

You must be renting out the property or have committed to renting it out as a main residence for a period of at least five years.

There is no limit on the number of rental properties giving rise to a tax credit.

• Loc'avantage tax reduction

Since 1 January 2022, non-resident taxpayers have been entitled to the Loc’Avantages tax reduction (Article 199 tricies of the French General Tax Code) provided that the effective date of the agreement precedes the date of their move abroad. 

• Other exceptions

Non-resident taxpayers who carry on a non-wage professional activity are also eligible for certain tax credits for companies.

Maintenance payments may be deducted from worldwide income to calculate the average rate, under certain conditions.

Maintenance payments may be deducted for the purpose of calculating the average rate, provided the payments are taxable in France for the recipient and did not give rise to a tax break for the payer in their country of residence.

For more information about the average tax rate, see: What is the average tax rate? Eligibility