Income tax: the rules for tax domiciliation
1. The general rule
In Saint-Martin's internal law, the rules for tax domiciliation are provided for in article 4 B of the general tax code of the community of Saint-Martin:
The following shall be deemed to have their fiscal domicile in Saint-Martin within the meaning of Article 4 A (...):
at. Persons who have their home or place of principal residence in Saint-Martin;
b. Those who practice a professional activity, whether employed or not, in Saint-Martin, unless they justify the fact that this activity is carried out on an ancillary basis;
c. Those who have in Saint-Martin the center of their economic interests.
These four criteria - home location; Place of principal stay; Place of employment; Place of the center of economic interests - are assessed successively in this order.
To have his fiscal domicile in Saint-Martin, it is enough that one of its criteria is satisfied.
2. The special rule known as "five years"
In order to prevent a risk of relocation of taxpayers towards the community of Saint-Martin, taxation presupposed advantageous, in 2007, organic lawmaker subordinated the recognition of a tax domicile in Saint-Martin to a special condition, That of having resided for at least five years in the community (CGCT, art LO6314-4).
I. The community of Saint-Martin exercises the powers it holds of the 1 ° of the I of the articleLO 6314-3In respect of taxes, duties and taxes in accordance with the following provisions:
1 ° Natural persons whose domicile for tax purposes was established in a département in mainland France or overseas within five years prior to their establishment in Saint-Martin can not be considered as having their fiscal domicile in Saint Martin, After having resided there for at least five years.
This provision, however, only applies to natural persons who had previously had their fiscal domicile in a department of metropolitan France or overseas.
§ 5 of the Protocol annexed to convention Between the State and the Community of Saint Martin for the avoidance of double taxation and the prevention of fiscal evasion and fraud, signed at Saint-Martin on 21 December 2010, specifies that the persons concerned by this "rule of Five years "shall be deemed to have their fiscal domicile in Guadeloupe:
5. Income tax (...) of persons settled in Saint-Martin and residents of the State within the meaning of Article 4 of the Convention shall be calculated in accordance with the taxation rules for persons domiciled or having Exploitation in the department of Guadeloupe.
3. The consequences of a direct debit in Saint-Martin
a) Persons whose domicile for tax purposes is located in Saint-Martin are liable to the income tax applicable locally due to the totality of their income from all sources.
It is therefore an "unlimited" tax liability: whatever its nationality (French or foreign), the taxpayer must, in principle, be liable to tax in Saint Martin on all its Source Saint-Martin, French (outside Saint-Martin) or foreign.
Important : Persons who have their fiscal domicile in Saint-Martin and who receive income from outside Saint-Martin and outside France (St Maarten, USA, etc.) are not doubly taxed on the basis of such income because the tax Saint-Martin neutralizes Unilaterally double taxation :
Article 199 bis
The tax paid by the taxpayer domiciled in Saint-Martin to a State or territory outside Saint-Martin on account of a positive income deriving from that State or territory shall be eligible for a tax credit.
This tax credit is equal to the amount of the tax paid in the State or territory outside Saint-Martin. It may not, however, exceed the amount of the Saint-Martin tax corresponding to such income.
The tax credit is chargeable to Saint-Martin's tax on the basis of which the income qualifying for the tax credit is included. Any surplus can not be carried forward or repaid.
The tax credit shall be credited at the taxpayer's request, on the occasion of the declaration referred to in Article 170, or by means of a complaint. In all cases, it is supported by proof of the tax paid in the State or outside territory in Saint Martin.
The provisions of this Article shall apply subject to the double taxation agreements.
In the case of income from "source State" (metropolitan or overseas departments), double taxation is neutralized in accordance with the 21 December 2010 State / Community tax treaty.
b) Persons who do not have their fiscal domicile in Saint-Martin are liable to be subject to Saint-Martin's tax only if they have income from Saint-Martin source within the meaning of article 164 B of the CGISM:
I. The following shall be deemed to be income from Saint-Martin's sources:
at. Income from real property located in Saint-Martin or from rights in respect of such immovables;
b. Income from variable-yield securities issued by companies based in Saint-Martin and all other movable assets placed in Saint-Martin;
c. Income from farms located in Saint-Martin;
d. Income derived from professional activities, whether employed or not, exercised in Saint-Martin or operations of a profit-making nature within the meaning of Article 92 and carried out in Saint-Martin;
e. The capital gains mentioned in Articles 150 U to 150 UC and the profits from operations defined in Article 35, when they relate to businesses operated in Saint-Martin and to buildings located in Saint -Martin, to real estate rights relating thereto or to shares and shares in unlisted companies whose assets consist principally of such property and rights;
f. The net gains referred to in I of Article 150-0 A and resulting from the transfer of rights, as well as those mentioned in item 6 II of the same article withdrawn from a repurchase by a company issuing its own securities, when the rights held Directly or indirectly, by the transferor or the shareholder or the shareholder whose shares are redeemed, together with his spouse, their ascendants and their descendants in the profits of a company subject to corporation tax and having its registered office at Saint-Martin have together exceeded 25% of these profits at any time during the last five years;
g. The sums, including salaries, paid as of 1XXXXXXXXXXX, corresponding to artistic or sporting services provided or used in Saint-Martin.
II. The following shall also be considered as income from sources in Saint-Martin when the debtor of the income has his fiscal domicile or is established in Saint-Martin:
at. Pensions and annuities;
b. The products defined in Article 92 and collected by the inventors or as copyright, those collected by the breeders of new plant varieties within the meaning of Articles L623-1 to L623-35 of the Intellectual Property Code, as well as All proceeds derived from industrial or commercial property and similar rights;
c. The amounts paid for services of any kind provided or used in Saint-Martin.
Their tax is calculated according to the same rules as those applicable to Saint-Martin residents when the amount of their income from Saint-Martin sources represents at least 75% of the total amount of their income (see specific notice available below). If this condition is not met, the tax is determined according to specific rules.