The French Finance Committee has adopted an important amendment introducing the concept of a “targeted universal tax” that will apply to French citizens living in countries with lower tax rates. This initiative aims to ensure that citizens who previously lived in France maintain a connection to the national tax system even when abroad. Under the proposed system, those who spent at least three years in France in the last decade before moving would be required to pay taxes equivalent to their hypothetical tax burden in France.
The amendment introduces mechanisms to prevent double taxation, an important aspect for those affected by the new system. French citizens living abroad will be required to pay taxes corresponding to those they would have paid while in France, but will be able to receive a tax credit for any taxes paid in their new country of residence. This creates a more balanced and fair tax environment for citizens who are looking to avoid an additional burden.
The scope of the amendment is quite broad and affects not only income tax, but also inheritance tax, capital gains and dividends. This approach demonstrates the desire of the French government to control tax flows and protect the interests of its economy. The authors of the amendment, referring to previously proposed initiatives, assure that the new system complies with existing European legislation and tax conventions, which should facilitate its implementation and application in international practice.
The LFI-NFP group has developed a targeted approach to addressing international tax competition, focusing on preventing the tax burden from shifting to the working and middle classes. This proposal differs from the US tax model based on citizenship. The French approach is aimed exclusively at those who live in countries with significantly lower tax rates – at least 50% lower than in France. This initiative is met with both support and criticism in political circles, which creates a lively debate on its feasibility.
For his part, Jean-Paul Mattei of the Democratic Movement (MoDem) focuses on the structural aspects of the proposal. He emphasizes that the tax situation for citizens living abroad requires careful consideration. This amendment aims to address what the government calls the “lower income problem”, while also seeking to strengthen France’s position in international negotiations on tax harmonization. The measure is currently awaiting a vote in the National Assembly, and the government retains the option of revoking it mediante of Article 49.3 of the Constitution, given the current balance of power in the Assembly, where there are 126 RN and 193 NFP deputies. As Coquerel noted, the implementation of this reform requires the revision of 129 bilateral tax agreements, and the text of the bill could be reworked before the final vote.
For his part, Jean-Paul Mattei of the Democratic Movement (MoDem) focuses on the structural aspects of the proposal. He emphasizes that the tax situation for citizens living abroad requires careful consideration. This amendment aims to address what the government calls the “lower income problem”, while also seeking to strengthen France’s position in international negotiations on tax harmonization. The measure is currently awaiting a vote in the National Assembly, and the government retains the option of revoking it mediante of Article 49.3 of the Constitution, given the current balance of power in the Assembly, where there are 126 RN and 193 NFP deputies. As Coquerel noted, the implementation of this reform requires the revision of 129 bilateral tax agreements, and the text of the bill could be reworked before the final vote.
