LMNP and non-residents: Does French law conflict with European law?

Earlier this year, the Minister responded to a parliamentary question by stating that, when assessing whether the majority of a non-resident taxpayer’s business income qualifies for the LMNP scheme, only income from French sources should be taken into account.

Such an interpretation—which is also mentioned in the BOFiP—may not be consistent with fundamental European freedoms, particularly the free movement of capital.

There is, in fact, a difference in treatment between residents, for whom the threshold is assessed based on their worldwide income, and non-residents, for whom the threshold is assessed based on their French income. An appeal for abuse of power against the administrative doctrine could be considered in this regard, including for third-country residents.