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France: Personal Taxation

Expatriate Tax Package

This page was last updated on 15 Nov 2018.

In 2007 the French parliament voted on a new law giving more favourable tax regime to impatriates. The new special expatriate tax regime went into effect on 1 January 2008.

Under the old regime, taxpayers who were sent to France by their employers were eligible for tax breaks for a "limited period." Under the new rules, these tax breaks will be extended to individuals directly employed by a French employer, also for a limited period. However, in order to qualify for favourable tax treatment under the new regime, the taxpayer must not have been resident in France in the five tax years immediately preceding the commencement of their employment or assignment.

These favourable provisions apply up to 31st December following the fifth anniversary of their arrival in France.
The expatriate regime allows income tax exemptions on:

  • Additional pay that is directly linked to carrying out a professional activity in France (expatriate bonus)
  • The share of pay relating to foreign activity carried out in the interests of the employer
  • 50% of income from investments from foreign sources, and 50 % of certain intellectual and industrial property rights from foreign sources. Payment must have been made by a person based outside France in a territory with an extant tax treaty with France that contains an administrative assistance clause to combat tax evasion and avoidance.
  • 50 % of capital gains on the sale of securities and ownership interests from foreign sources.

Beneficiaries may also deduct contributions to existing supplementary retirement and pension schemes from their taxable income.

 

 

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