Liability for French Income Tax

[Tom Woods]

I brought a house in France late in 2001, and used it for holidays, moving there from Slovakia in early July 2003.

I work in the Middle East in the oilfield and spend less than half of the year in France. I do not work whilst I am in France and receive my salary via an American bank. My wife does/has worked in France during/since 2003 (we do not have children).

We submitted joint income tax returns for 2003 and 2004. Whilst we were not liable in 2003, we have just received a demand for 2004, approximately 15% of our gross income. Aside from numbers, the tax returns were filled in in a similar fashion.

I am a little mystified why our status has changed - the only difference I am able to see is that in 2003 we were 'resident' in France less than half of the year. We did however have our principal residence there during that year. Is the principal residence rule applied on a January 1 of the first full year basis?

Regards

Tom Woods

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