Leaving France: Tax Returns and Taxable Income in the Year of Departure

The year of departure is a year split in two. Up to the date of the move, the taxpayer is taxed as a resident, on their worldwide income. From that date, they are taxable in France only on their French-source income. This split requires two separate returns, filed together the following year, and moves the file to a dedicated tax office.

The full timeline of a departure is set out on our tax expatriation lawyer page.

How is income taxed before and after the departure date?

Article 4 A of the French Tax Code (code général des impôts, CGI) sets the principle: persons domiciled in France are taxable on all their income, others only on their French-source income.

• From 1 January to the departure date: taxation under the rules applicable to residents, with the progressive scale of Article 197 and the family quotient (quotient familial). This income is reported on return 2042.
• From the departure date to 31 December: taxation under the rules applicable to non-residents, on French-source income only. This income is reported on return 2042-NR.

The departure date used is the date of the actual transfer of domicile, assessed according to the criteria of Article 4 B of the CGI. It must be documented: see our article on tax residence.

Which French-source income remains taxable after you leave France?

Article 164 B of the CGI lists this income. The most common items:

• income from real estate located in France, whether rental income from unfurnished or furnished lettings;
• income from businesses operated in France;
• salaries, wages, pensions and life annuities when the payer is established in France;
• capital gains on the sale of French real estate or French real estate rights;
• income from French securities and other movable capital invested in France.

French-source salaries and pensions paid to a non-resident are subject to the withholding tax provided for in Article 182 A of the CGI, deducted by the payer. A tax treaty may, however, allocate the right to tax to the State of residence: the treaty prevails over domestic law.

The 20% and 30% minimum tax rates for non-residents

Article 197 A of the CGI provides that the tax due by a non-resident on their French-source income cannot be lower than a minimum rate.

• 20% on the portion of net taxable income not exceeding the upper limit of the second band of the scale, i.e. €29,579 in the version resulting from the 2026 Finance Law.
• 30% above that threshold.
• The rates are reduced to 14.4% and 20% for income sourced in the French overseas departments.

The taxpayer may request application of their worldwide average rate where it is more favourable, provided they substantiate all of their income. Persons residing in a European Union Member State or in a State bound to France by an administrative assistance agreement may submit a sworn statement pending the supporting documents.

Which tax returns to file, and with which tax office?

The original tax office keeps the file until it has processed the return filed in the year following departure. Where French-source income remains taxable in France, the file is then transferred to the tax office for non-resident individuals (service des impôts des particuliers non-résidents). When filing online, form 2042-NR is accessed through the additional returns tab (déclarations annexes).

A worked example

An executive transfers his domicile to Portugal on 30 June 2026. He received €45,000 in French salaries from 1 January to 30 June. He keeps a let flat in Lyon, which produces €18,000 of net rental income a year, i.e. €9,000 for the second half of the year. He is single, with no other French income.

• Return 2042: the €45,000 of salaries, taxed under the scale of Article 197, after the deduction (abattement), with one family quotient share.
• Return 2042-NR: the €9,000 of French-source rental income. As this amount is below €29,579, the minimum rate of 20% applies, i.e. €1,800, excluding social levies.
• Option for the average rate: if the average rate resulting from all of his worldwide income is below 20%, he may request its application and reduce the tax, by substantiating his Portuguese income.
• Form 3916: the Portuguese bank account opened before departure must be declared for the period of residence.

Both returns are filed together, in 2027, for 2026 income.

The most costly mistakes

• Filing only one return. Omitting the 2042-NR leaves the French-source income of the second half of the year undeclared, which results in a reassessment with late-payment interest.
• Forgetting form 3916. An account opened abroad before departure must still be declared for the period of residence. The omission extends the reassessment period from three to ten years, unless it is shown that the balance of the foreign accounts did not exceed €50,000 during the year (Article L. 169 of the French Tax Procedure Code (livre des procédures fiscales)).
• Overlooking withholding tax. The French payer of a salary or pension must apply the withholding tax of Article 182 A as soon as it knows of the residence abroad. A late adjustment creates a cash-flow gap.
• Confusing the moving date with the date of transfer of domicile. Only the latter counts, and it is assessed on the facts.

Key points

• The year of departure is declared in two stages: 2042 for the period of residence, 2042-NR for the subsequent French-source income.
• The minimum rate is 20% up to €29,579 of net taxable income and 30% above, unless the worldwide average rate is opted for.
• The file moves to the tax office for non-resident individuals where French income remains taxable.

FAQ

When should the return for the year of departure be filed?
In the year following departure, by the usual deadlines of the filing season. The two forms, 2042 and 2042-NR, are filed together.

Must foreign income received after departure be declared?
No, provided the domicile has actually been transferred. Only French-source income is still declared in France for the period after departure. Foreign income received before departure is reported on return 2047.

Does the 20% minimum rate always apply?
It is a floor. The taxpayer may request application of their worldwide average rate when it is lower, by substantiating all of their income.

Do you need to appoint an agent or a representative?
An accredited tax representative is required for certain transactions, in particular the sale of real estate by a non-resident established outside the European Union and the European Economic Area. For routine returns, an agent is useful but not mandatory.

What happens if you return to France?
The mechanism works in reverse: form 2042-NR is also used to declare French-source income received before the date of return.

Preparing your tax returns

We prepare the returns for the year of departure, their interaction with the applicable tax treaty and, where applicable, the exit tax return. See our article on exit tax, our analysis of the retroactivity of the Finance Law (in French) and our transfer of tax residence page. Every situation is different and calls for a specific analysis.

Official sources

• Article 4 A of the French Tax Code, scope of tax liability – Légifrance (in French)
• Article 164 B of the French Tax Code, French-source income – Légifrance (in French)
• Article 182 A of the French Tax Code, withholding tax – Légifrance (in French)
• Article 197 of the French Tax Code, income tax scale – Légifrance (in French)
• Article 197 A of the French Tax Code, minimum rate applicable to non-residents – Légifrance (in French)
• Article 1649 A of the French Tax Code, declaration of accounts held abroad – Légifrance (in French)
• French Public Finances Directorate General (DGFiP), form No. 2042-NR – impots.gouv.fr (in French)
• French Public Finances Directorate General (DGFiP), page (French title: “Comment déclarer les revenus relatifs à l’année de mon départ à l’étranger ?”; translation: How do I declare income for the year of my departure abroad?) – impots.gouv.fr (in French)

This article presents the law for general information purposes, verified at the date of publication. It does not constitute legal advice. Every situation is different and calls for a specific analysis. Content compliant with the professional conduct rules of the legal profession.