France – abolition of the quitus fiscal procedure
Context
Belgian resident taxpayers transferring their tax residence abroad are under the obligation to file an “exit” income tax return within the 3 months following their departure. The French tax system provided for a similar exit system, although the exit French resident tax return had to be filed 30 days before the leaving date and the tax had to be paid immediately (i.e. what is referred to as the “quitus fiscal” procedure).
News
The French Correcting Finance Act 2004 (Law 2004-1485, article 30*) has abolished this “quitus fiscal” procedure. As of 1 January 2005, taxpayers leaving France will need to file their exit tax return within the standard filing deadline (i.e. in the year following the year during which the income is received). Income to be reported in the exit tax return is income that is received until the date of the transfer of residence. In short: the main impact of the repeal of this quitus fiscal procedure is that the payment date of the tax is deferred until the year of filing (i.e. the year after the departure).
(*) http://www.legifrance.gouv.fr/WAspad/UnTexteDeJorf?numjo=ECOX0400254L
Posted: March 2nd, 2005 under HRS headlines.