Returning to France: the often-overlooked second leg

A return to France after a UAE stint is the second pivotal moment of an expatriation. It is often less prepared than the departure — yet it carries fiscal consequences that can be as material. This page outlines the framework for French expatriates contemplating a return, with particular attention to the interaction between French residency rules, the UAE-issued Tax Residency Certificate, and the deferred exit tax that may still be in force.

French residency on return

Article 4 B of the CGI sets the French residency tests: foyer or principal place of stay, professional activity in France on a non-accessory basis, and centre of economic interests. Any one of these tests, applied to facts on the ground after the return, can re-establish French residency. The 2025 finance act explicitly codified the conventional override: a person meeting the French criteria may nevertheless be treated as non-resident if a tax treaty allocates residence to the other State.

The deferred exit tax: relief on return

For an individual whose departure triggered French exit tax under Article 167 bis CGI, a return to French tax residence before any taxable triggering event is a major event. Under paragraph VII of Article 167 bis CGI, the return may trigger relief or refund of the exit tax on unrealised gains where the statutory conditions are met, in particular where the relevant securities remain in the taxpayer's estate. This mechanism must be distinguished from the separate 2- or 5-year relief period and from the treatment of earn-out receivables or deferred gains.

Re-establishing French residency: the calendar

The date of return that triggers the recovery of French residency is determined by the application of article 4 B CGI. In practice:

• If the foyer is re-established in France, residency runs from that date.
• If the professional activity is taken up in France, residency runs from the resumption date.
• If the centre of economic interests is moved, residency runs from the corresponding event.

The transition may give rise to a "split year" where the taxpayer files a French tax return covering only the post-return period. The pre-return period is treated as non-resident, with French source income taxed under the non-resident rules.

The impatriate regime — article 155 B CGI

An expatriate returning to France after at least 5 years of non-residency may benefit from the impatriate regime of article 155 B CGI. Key features:

• Exemption of impatriation premium (the part of remuneration exceeding the equivalent French-resident salary), capped at 30% of total remuneration.
• Exemption of 50% of certain foreign source passive income (dividends, interest, capital gains).
• Eligibility: returning expatriate or impatriate first-time arriving, on French employment contract, not French resident in the 5 prior calendar years.
• Duration: until 31 December of the 8th year following arrival — extended to the 8th year for those taking up duties on or after 6 July 2016 (Loi de finances pour 2017, loi n° 2016-1917 of 29 December 2016).

French situated assets: the post-return regime

Real estate held in France during the UAE stint is taxable as follows on return:

• Rental income: integrated into the French global income with progressive scale and prélèvements sociaux. Income from unfurnished letting (revenus fonciers) remains subject to social contributions at 17.2%; the 18.6% rate resulting from the 2026 LFSS applies to mobile capital income and to furnished-letting BIC income.
• Real estate capital gains: the residency at the date of disposal determines the regime. A disposal post-return follows the normal resident regime (length-of-holding allowances, principal residence exemption where applicable).
• IFI (wealth tax on real estate): resumes on French and worldwide real estate.

UAE assets: the integration into the French tax base

UAE situated assets are integrated into the French tax base on return:

• Bank accounts: declared on form 3916 (article 1649 A CGI) every year.
• Insurance contracts: declared on form 3916-bis (article 1649 AA CGI).
• Trust interests: declared on form TRUST (article 1649 AB CGI).
• UAE company holdings: included in the personal income tax computation, with FTC for any UAE Corporate Tax paid by the UAE entity (limited interaction given the absence of personal income tax in the UAE).
• UAE source dividends: taxed under the PFU (12.8% IR + 18.6% PS = 31.4%), subject to the France-UAE treaty allocation.

Practical roadmap for the return

1. Audit at T-12 months: residency analysis, deferred exit tax status, IFI exposure, impatriate eligibility.
2. Anticipate French employer onboarding, payroll structure, and impatriation premium clauses.
3. Document the UAE departure (TRC of the year of return, Cabinet Decision 85/2022 evidence of past residency).
4. Notify the French tax authorities of the return at the latest within 60 days.
5. Terminate the fiscal representative appointment and request the release of guarantees.
6. File the year of return tax return with split-year treatment.
7. If applicable, file the impatriate regime election in the first French tax return.
8. Update declarations on French and foreign accounts (3916, 3916-bis, TRUST).