In 2024, the United Arab Emirates was among the top five expatriation destinations for French taxpayers. Yet a significant proportion of them remain taxable in France without realising it, having failed to appreciate the gap between settling in Dubai and transferring their tax residence there.
Tax residence is the cornerstone of your personal taxation: it determines which state has the right to tax you and on what basis. However, France and the Emirates each apply their own criteria to claim this status, so that a taxpayer may, without even being aware of it, be regarded as resident by both states at the same time. The risk is then double taxation, or even a tax reassessment. The France-UAE tax treaty of 19 July 1989 does provide tie-breaker mechanisms, but it also contains a safeguard clause that would allow France to reclaim the right to tax certain taxpayers.
This article sets out to explain the tax residence criteria in each jurisdiction, the treaty solutions in the event of a conflict, and the practical consequences of moving your domicile to Dubai.
I. Tax residence criteria: what each state requires
A. In France: the three alternative criteria of Article 4 B of the CGI
Persons domiciled in France are, in principle, taxable on their worldwide income[1]. To determine domicile, Article 4 B of the French General Tax Code (CGI) sets out three alternative criteria[2]: meeting just one of them is enough to be regarded as a French tax resident.
The first relates to the home or the principal place of stay: habitually living in France with one’s family, or staying there for more than 183 days a year, is sufficient.
The second is carrying on a principal professional activity in France; a company director who retains operational duties within a French company thus remains exposed, even if physically resident in Dubai.
The third, lastly, is the centre of economic interests: if most of your assets, income or business remains in France, the tax authorities may consider that your tax domicile has never been transferred.
Recent case law confirms this. In a judgment of 5 November 2025, the Paris Administrative Court of Appeal refused to recognise the Emirati tax residence of a couple who had indeed obtained a residence certificate in the UAE, but had kept their home in France: a lease, an active Enedis electricity meter, social security registration[3]. In other words, producing an Emirati residence certificate is not enough; one must also demonstrate that ties with France have genuinely been severed and that one has actually settled in the Emirates.
B. In the Emirates: a framework now formalised
On the Emirati side, the concept of tax residence was long subject to little regulation. Since Cabinet Resolution No. 85 of 2022[4] came into force, there have been three alternative routes to tax residence:
- demonstrating that one’s usual place of residence and centre of personal and financial interests are in the Emirates;
- having been physically present in the country for 183 days or more in any 12-month period;
- or, for UAE nationals, having stayed there for at least 90 days, on the twofold condition of holding a valid residence permit and having a permanent residence or carrying on a professional activity there.
II. Resolving residence conflicts and the French safeguard clause
A. The tie-breaker criteria of the France-UAE treaty
Where a taxpayer is claimed by both states under their respective domestic laws, the France-UAE tax treaty of 19 July 1989 steps in to resolve the conflict. Article 4 sets out a sequence of criteria applied in strict order[5]:
- first, the permanent home, refined by the centre of vital interests where there is a home in both states;
- next, the habitual abode;
- third, nationality;
- and, as a last resort, a mutual agreement procedure between the competent authorities.
Our practical recommendation
To secure your change of residence, build a convincing file from the outset: termination of the lease or sale of your main residence in France, enrolment of your children in a school in Dubai, opening of bank accounts in the UAE, transfer of social security cover, obtaining a residence visa. Each element helps to establish the reality of your move and the severing of your ties with France.
B. Article 19(2): when does France take back control?
The treaty contains an unusual provision. Article 19(2) provides that where a person is resident in the Emirates within the meaning of the treaty but remains domiciled in France for tax purposes under domestic law, France retains the right to tax all of that person’s income. The only exception: Emirati citizens. As there is no income tax in the UAE, the tax credit granted by France is nil, which amounts to full taxation in France.
The 2025 Finance Act has, however, introduced an element of uncertainty. Article 83 supplemented Article 4 B of the CGI by providing that a person meeting the domicile criteria can no longer be regarded as domiciled in France for tax purposes where a treaty treats that person as resident in another state. Yet it is precisely domicile within the meaning of domestic law that triggers the safeguard clause. One may therefore legitimately ask whether this reform has the effect of depriving Article 19(2) of its anchor. The prevailing academic view seems to be that the clause should withstand the change, on the ground that it was specifically designed to refer to French domestic law rather than to the treaty definition. The tax courts have not yet ruled on the point, however, and this uncertainty calls for caution in any strategy of relocating to the Emirates.
III. Exit tax: the toll for leaving for Dubai
Transferring one’s tax domicile out of France triggers the exit tax mechanism provided for in Article 167 bis of the CGI[6]. This regime taxes the unrealised capital gains on shares and securities held by the taxpayer at the date of departure, where their total value exceeds 800,000 euros or they represent more than 50% of the profits of a company. The taxpayer is thus taxed on wealth not yet realised, without any sale having taken place.
The question of deferral of payment is decisive here. For a move to the Emirates, deferral must be expressly requested and remains conditional on the appointment of a tax representative established in France and on the provision of financial guarantees to the public accountant, in an amount equal to 12.8% of the gross amount of the capital gains recorded.
Worked example
A company director holds shares worth 1,500,000 euros, acquired for 700,000 euros. The unrealised capital gain amounts to 800,000 euros. To obtain deferral of payment when leaving for Dubai, he or she will have to provide a guarantee of 102,400 euros (800,000 × 12.8%). If the shares remain in his or her estate for two years after the transfer (five years where their total value exceeds 2.57 million euros), the tax will be cancelled automatically.
Dubai undeniably offers an attractive tax environment, particularly for individuals. But attractiveness is no substitute for rigour. Becoming an Emirati tax resident requires an effective severance of ties with France, a genuine physical move to the Emirates and forward planning of the consequences of the transfer, whether in terms of the exit tax, the safeguard clause in Article 19(2) or the residence of your companies. A poorly prepared relocation can lead to heavy tax reassessments that the treaty will not be enough to neutralise.
***
Bruzzo Dubucq advises entrepreneurs and investors considering a move of residence to the United Arab Emirates. Our team works ahead of departure to secure your tax residence, structure your investments and anticipate all the tax consequences of your relocation.
[1]Article 4 A of the French General Tax Code.
[2]Article 4 B of the French General Tax Code.
[3]CAA Paris, 5 November 2025, no. 24PA02106.
[4]Cabinet Resolution No. (85) of 2022 Determining the Tax Residence, in force since 1 March 2023.
[5]Convention between the Government of the French Republic and the Government of the United Arab Emirates for the avoidance of double taxation, signed in Abu Dhabi on 19 July 1989, as amended by the Amendment of 6 December 1993, Art. 4(2).
[6]Article 167 bis of the French General Tax Code, as worded since 1 January 2024.
