• Scope of the French income tax (Article 21 of the 2015 Amending Finance Law) : as of the taxation of income received in 2015, non-residents of France are only subject to income tax on their French-sourced income. Indeed, the flat tax rate applying because of a property in France, pursuant to article 164 C of the FTC, rarely applied in practice, is suppressed because of its non-compliance with the EU principle of free movement of capital.  
  • Documents to rule out the application of the French minimum tax rate of 20% (or 14.4%) applicable to non-residents of France (article 120 of the 2016 Finance Act) : non-residents of France receiving French-sourced income may be subject to a flat tax rate for French income tax purposes unless they prove that the rate of French tax which would have been calculated on their worldwide income is less than the flat rate of 20% or 14.4%. To this end, they had to attach supporting files to their French income tax return to demonstrate it.

In practice, if the supporting file was not yet available, notably because the filing date are the same in each country, the French tax authorities are likely to apply the flat tax rate. As of the taxation of income received in 2015 to report in 2016 to the French tax authorities, non-residents of France can now attach to their French income tax return a solemn declaration, while awaiting to be able to provide the required justifications. The application of the French flat tax rate should thus be more limited.