Tax residency: why the 183-day rule is a dangerous myth

Few tax myths are as persistent — and as costly — as the idea that spending fewer than 183 days in France is enough to avoid French tax residency.

It is not.

And relying on that assumption is one of the most fragile mobility strategies an entrepreneur can adopt.

The 183-day threshold does exist under French domestic law. But it becomes largely irrelevant the moment more than one country can plausibly claim you as a tax resident. At that point, domestic rules step aside, and tax treaties take over.

What matters then is not how many nights your suitcase spends in a country, but where your life is actually anchored.

The 183-day rule: what it really is (and what it is not)

Under French domestic law, the 183-day rule is one of several criteria used to determine tax residency. It can be relevant in purely internal situations, where no other country asserts a competing claim.

But its scope is limited.

As soon as another jurisdiction can also treat you as a tax resident under its own rules, the analysis shifts. Domestic law no longer decides the outcome on its own.

This is precisely where many entrepreneurs go wrong: they treat a domestic threshold as if it were an international safe harbour. It is not.

When tax treaties override domestic law

When two states can both claim tax residency, the applicable tax treaty prevails over domestic legislation.

This is not a technical nuance. It is a fundamental principle of international tax law.

Most tax treaties follow Article 4 of the OECD Model Tax Convention, which provides a hierarchy of criteria — commonly referred to as the “tie-breaker” — to resolve situations of dual residency.

Once a treaty applies, residency is no longer determined by day-counting. It is determined by substance.

The treaty tie-breaker explained

Under Article 4 of the OECD Model Tax Convention, tax residency is determined by applying the following criteria, in order:

• Permanent home
• Centre of vital interests
• Habitual abode
• Nationality
• Mutual agreement between the states, if all else fails

In practice, this hierarchy is rarely applied mechanically all the way down. The analysis usually stops much earlier.

The decisive criterion, in the vast majority of cases, is the centre of vital interests.

The centre of vital interests: where tax disputes are really decided

The centre of vital interests reflects where your personal and economic life is most deeply rooted.

Tax authorities and courts look at a combination of factual elements, including:

• where your family actually lives,
• where your business activities are effectively managed,
• where key strategic decisions are made,
• where your main assets are located,
• and where your economic footprint is genuinely anchored.

This is not about optics. It is about coherence.

A taxpayer who claims to be resident in one country while maintaining their family, business command centre and economic interests in another leaves significant room for challenge.

Why day-counting fails in practice

Day-counting feels reassuring because it is simple. It creates the illusion of control through arithmetic.

But tax residency disputes are not decided by spreadsheets. They are decided by an overall assessment of facts.

Entrepreneurs who focus exclusively on the number of days spent in a country often overlook far more decisive elements:

• where they actually work,
• where their companies are run,
• where decisions are taken,
• and how their life is organised on a day-to-day basis.

When these elements point in a different direction than the day count, the day count loses most of its defensive value.

What it really takes to secure a tax residency

Securing a tax residency is not about minimising presence. It is about building consistency.

A robust residency position requires:

• alignment between personal life, professional activity and asset location,
• clear economic and decision-making anchors,
• and credible evidence supporting the chosen country of residence.

Tax treaties are designed to identify where a person truly belongs from a fiscal perspective. They reward coherence. They expose artificial arrangements.

Conclusion: a checklist before residency becomes a dispute

Before relying on a mobility strategy built around day-counting, it is worth stepping back and asking a few fundamental questions.

A practical checklist for international entrepreneurs and HNWIs

You should be able to answer “yes” to each of the following:

• Is there a clear and identifiable country where your personal life is genuinely centred?
• Are your business activities effectively managed from the country you claim as your tax residence?
• Do your assets, investments and decision-making structures point consistently to the same jurisdiction?
• Would your situation remain coherent if analysed under a tax treaty, not domestic law?
• Can you substantiate your position with facts and documentation, not just travel records?

If one or more of these questions raises doubt, the issue is rarely marginal. It is structural.

How we can help

At Altara Tax, we assist international entrepreneurs and high-net-worth individuals in securing and defending their tax residency in cross-border contexts.

Our work focuses on:

• analysing residency under applicable tax treaties,
• aligning personal, professional and economic ties,
• and building residency positions that withstand scrutiny, not just assumptions.

A tax residency built on coherence and evidence holds under pressure.

One built on myths rarely does.