US Investments and French Tax Residence
You are an individual with a full-time job in France, earning a local salary, while maintaining a personal investment portfolio in the United States. You assumed that the funds in your US brokerage account, accumulated prior to your move to France, would not be subject to French taxation. However, the conflict arose when you decided to use those funds to purchase property in France, raising questions about tax obligations in both countries.
Input Data
- Employment location: France
- Investment location: United States
- Property purchase: France
- Funds transfer: From US to France for property purchase
Jurisdiction Conflict
Country of registration — The United States recognizes the brokerage account as compliant with US tax laws, as it was opened and maintained there. Income generated from investments is subject to US taxation.
Country of effective activity — In France, the individual's center of vital interests is established, and French tax residency rules apply. All global income, including funds transferred from the US, is subject to French taxation once utilized domestically.
Conflict — The use of US-sourced funds for a property purchase in France creates a potential tax liability. The US-France tax treaty may mitigate double taxation, but the funds' application in France triggers local tax obligations, leading to a risk of dual taxation and compliance challenges.
AI Analysis
Scenario A — Funds remain in the US
- French authorities may not pursue taxation if funds are not utilized in France.
- No immediate tax consequences in France.
- Risk: Low risk of French tax liability.
Scenario B — Funds transferred to France
- French authorities may deem funds taxable upon transfer for property purchase.
- Potential French tax liability arises.
- Risk: High risk of dual taxation without treaty relief.
Scenario C — Treaty application
- Application of the US-France tax treaty could provide relief from double taxation.
- Complex tax filings required to claim treaty benefits.
- Risk: Moderate risk if treaty benefits are not properly claimed.
Key risk indicators
- Transfer of funds from US to France.
- Use of funds for property purchase in France.
Output of Richys AI Analysis
- AI identifies potential French tax exposure due to fund transfer.
- AI matches the transfer of funds with French tax residency rules.
- AI highlights the need for expert escalation to navigate treaty applications.
Expert Boundary
Involvement of a verified EU expert is required for:
- country-specific interpretation of the center of vital interests
- application of the US–France tax treaty to concrete facts
- selection of a defensible filing position
- preparation for potential tax authority inquiries
Case Conclusion
French tax authorities observe the transfer of funds for a property purchase. The assumption that pre-residency earnings are exempt is exposed as false. The mismatch between the legal residence and the factual use of funds is identified. Risk becomes material when funds are transferred and used in France.
Start case analysisThis case is for illustration purposes only. Real outcomes depend on residence, income structure, documents and timing. For your specific situation, use structured case analysis with AI and verified EU experts.
Mathieu Fiscalis
AI assistant – Taxes & Cross-Border Tax