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As I understand it, quite a few countries have double-taxation agreements between themselves, which dictate how you handle income and taxation in one country if resident in another. A fair number of these (but by no means all!) have clauses in them which mean that if you are deemed to be tax resident in one of them, you are automatically not a tax resident in the other one.

In theory, this should mean that if last year you were tax resident in County A, then this year you move to Country B and are counted as a tax resident there for this year, then you pay your taxes for last year to Country A and this year's to Country B. (Leaving aside complications about income you still get from Country A while living in Country B, which may well still be paid to A with B giving you a credit for the tax already paid)

Sounds simple enough, but... What happens when Countries A and B have different dates for their tax years?

(eg you move from the UK to France on 1st Feb, and are deemed to be a French tax payer for that French tax = calendar year, how does it work with the UK tax year running to the 5th April?)

  • Interesting that not everyone considers a year to be a calendar year from Jan 1 to Dec 31... – Karlson May 14 '14 at 15:40
  • See this snippet on wikipedia for why the UK personal tax year is on the dates it is! – Gagravarr May 14 '14 at 15:53
  • I think this depends on where you got your income. Until you get your income and are a resident in Country A, then you pay taxes there. Once you move to Country B, you become a tax resident there and have to tax your income accordingly. What might be more interesting is how tax credits and similar work. For example in the UK you only have to pay income tax after the first few thousand pounds, which means if you arrive at the country just a few months before April you might get more money. – SztupY May 14 '14 at 15:59
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    @SztupY Filling a tax return is one thing but filling a tax return using the regular form/system as if you lived in the country for the whole year (thus making it look like your yearly income is much lower than what your monthly income would suggest) is quite another as it could create a significant advantage for you (in my experience, income taxes collected at the source are usually based on the assumption you get the same monthly income for the whole year). I know at least one country where using the regular tax return form/program is not allowed if you have lived abroad in a given year. – Gala May 14 '14 at 21:23
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    If there is a tax treaty between country A and country B, slog through it. IIRC the one between UK and France is relatively readable as these things go. – Gilles 'SO- stop being evil' May 19 '14 at 12:30
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It might not directly address your question in general but it turns out that income taxes do not work quite that way in France. I believe you only have to declare all your income (including income you would get from your former country of residence) starting on the date you moved to France. Before that date, you only need to declare what you earned from French sources. Same thing when you leave the country. If the other country works in the same way and your situation isn't too complicated, things could take care of themselves quite nicely.

  • It's been a while and I don't remember the details, but I think that your statement about declaring all your income vs what you earned from French sources is incorrect or at least very incomplete. The rules depend on the countries involved — there are bilateral treaties (not even anything EU-wide AFAIK). Depending on the countries involved, the time spent in each one, the kind of income on each side and your legal status abroad, foreign income may not be declared at all, or declared but not taxed, or straight taxed, or something in between. – Gilles 'SO- stop being evil' May 19 '14 at 12:29
  • @Gilles Well, I am no specialist but I was obviously speaking about the general case, as described in the link, with respect to the specific problem of moving during the tax year (the question is pretty general, too). The salient point is that even if there are no tax treaty with more advantageous rules, you don't need to declare your worldwide income for the whole tax year by default. – Gala May 19 '14 at 16:46

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