170 days in France, 15 in Morocco: tax authorities catch up with his €28 million in capital gains
A taxpayer claimed to be a tax resident in Morocco and had failed to declare more than €28 million in capital gains in France. An investigation reconstructed his movements: 170 days in France, compared with just 15 in Morocco.
The case concerns €28,008,456 in capital gains realized in 2014 from the sale of securities. The taxpayer filed no income tax return in France for that year, believing that his tax residence was in Morocco.
Following an audit launched in 2016, the French tax authorities took the opposite view, considering that he resided in France and claiming income tax, social security contributions and the exceptional contribution on high incomes, together with the corresponding penalties.
The taxpayer initially won his case. In May 2023, the Paris Administrative Court overturned the tax assessment, ruling that some connection data used by the tax authorities had been obtained unlawfully. The Ministry of the Economy appealed.
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A new report drawn up in January 2025 by the National Anti-Fraud Office changed the course of the case. This time, investigators relied in particular on entries into and exits from Moroccan territory obtained through international mutual legal assistance, as well as on testimony from relatives and employees.
An apartment, a bank account and two Moroccan phone lines
The tally was particularly unfavorable to the taxpayer. During 2014, he spent at least 170 days in France, split between Paris and his second home in Corsica. Of the 125 days identified abroad, only 15 were spent in Morocco. His whereabouts could not be established for the remaining 70 days.
Even if all 70 of those days were attributed to Morocco, his presence in the kingdom would have amounted to only 85 days, compared with 170 in France. Investigators also found that during some stays in Morocco, he did not sleep in the apartment he claimed was his home.
To support his claim of Moroccan tax residence, the man produced a lease, a local bank account, a credit card and two phone lines opened with Maroc Telecom. These documents do not prove that he actually and permanently occupied the property, the Paris Administrative Court of Appeal found in its ruling of 29 August 2025.
The tax treaty between France and Morocco places tax residence where a person’s permanent home is located. When someone has a home in both countries, it is necessary to identify the center of their professional activities and then the country where they stay the longest.
In this case, the court found neither that he had a permanent home in Morocco that he actually occupied nor that he had a center of professional activities in the kingdom. The length of his stays also pointed to France. The taxpayer was therefore considered a French tax resident for 2014.
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The anti-fraud report also enabled the tax authorities to overcome the irregularity that had led to the assessment being overturned at first instance. The new information did not come from the disputed connection data and confirmed that the taxpayer was primarily present in France.
The court overturned the 2023 judgment and reinstated the additional income tax, social security contributions and exceptional contribution, along with the penalties. The €28,008,456 represents the amount of capital gains subject to the assessment; the exact amount of tax claimed is not specified in the decision.
