Employees and managers relocating to France to work for a French company may benefit from personal income tax (“PIT”) exemptions of the “impatriate regime”. This article will discuss the benefits, conditions, and more.
Main benefits of the scheme:
✅ Impatriation bonus PIT exemption, which may be assessed at a flat rate of 30% of the total net income.
⚠️ further limitations may apply on the tax free bonus amount;
✅ PIT exemption for the portion of the income linked to the activity carried out outside of France for the employer’s interest;
✅ 50% PIT exemption of the income from foreign sourced dividends, interest, income from life insurance contracts and capital gains;
⚠️ conditions regarding the income payer location apply ;
⚠️ social security contributions (at a current rate of 17,2%) remain applicable on 100% of the income;
✅ 50% PIT exemption on foreign sourced intellectual or industrial property income;
📅 PIT exemptions are applicable for a period of 8 years.
- an exemption for 5 years from the French real estate wealth tax (IFI) on the real estate located outside of France;
- a possible exemption from the registration to the French compulsory social security schemes for basic and supplementary retirement/pension insurance for 3 years, renewable once.
Main conditions of the scheme:
➡️ duties carried out in France via (i) a recruitment from abroad by a French company, or (ii) an intra-group mobility (e.g. from a parent company to its subsidiary);
➡️ not to have been tax domiciled in France during the 5 years preceding the hire;
➡️ file a tax return n°2042, n°2042 C and n°2047 the year following the hire.
Understand More About the France Tax System
Yatax is a French law firm which operates in tax law, advising companies, managers and individuals. The firm provides practical, quantified and innovative solutions meeting client expectations in the context of a demanding and fastly evolving tax environment.
Connect with Julien to assist you with the confirmation of your eligibility to the impatriate tax regime and the assessment of the tax breaks.