Who this is for
HR, Reward and Global Mobility teams bringing an employee to France. Every guide to the impatriate regime is written for the employee. This one is written for the person drafting the offer letter — whose deadline is earlier and whose interest is the cost of the assignment.
⚠ Disclaimer. General information, current at the date of publication. It is not advice for a specific assignment: individual circumstances, the France–US tax treaty and the France–US social security agreement change the answer. Speak to us before acting.
Contents
- What the impatriate regime is, in one paragraph
- Why it is an employer question, not an employee question
- Who qualifies
- The case HR teams overlook: an employee coming back to France
- What is exempt
- How long it lasts
- The choice HR controls, and its deadline
- A worked example (illustrative figures)
- What HR should do, in order
- Common mistakes
What the impatriate regime is, in one paragraph
The impatriate regime — article 155 B of the French tax code — exempts part of the remuneration of employees and corporate officers recruited from abroad to work in France, for a fixed number of years. It exists to make France cheaper for the people companies most want to move there. Used properly it changes the economics of an assignment; missed, it is a cost the employee or the employer simply absorbs.
Why it is an employer question, not an employee question
Under a tax-equalized package — one where the employee keeps the tax position they would have had at home, a hypothetical home tax is withheld from their pay, and the employer settles the actual French tax whatever it turns out to be — the employer bears the employee’s French tax. A regime that reduces that tax reduces the employer’s cost directly, euro for euro. Under a non-equalized package it improves the employee’s net at no cost to you — which is a recruitment argument. Either way, the conditions that make it work are met or missed in documents HR controls, before the employee starts.
Who qualifies
According to the French tax administration, the regime applies to people who were tax resident outside France for at least the five calendar years before they start working for the company in France that recruits them, and who transfer their tax residence to France from the date they take up the position. It covers employees and corporate officers recruited directly from abroad by a French company, and those transferred within a group. Intra-group transferees have always been in scope; what the 2019 Finance Act added is that the flat 30% option is open to them as well as to direct recruits.
It is a regime for people called to France by a company. Someone who moves to France on their own initiative and then looks for work does not qualify, and nor does someone who had already established their home in France when they were recruited. The French-language guide to the regime for individuals is Régime des impatriés; this page is its employer-side counterpart.
The case HR teams overlook: an employee coming back to France
The regime is not only for people who have never worked for you in France. An employee who is called back to take up new duties at a company in France, at the employer’s request, after more than five years with a group company abroad — a retour d’expatriation, whether through a new contract or the reactivation of the previous one — can also benefit, provided all the regime’s conditions are met. That includes the five-year non-residence test, which those five years abroad will normally satisfy.
Why this matters to Reward
Returning expatriates are routinely put back on a French contract with no thought given to the regime, because everyone assumes it is a tool for inbound foreign hires. Check the condition on every repatriation after a long assignment — the employee is often eligible, and the eight-year clock starts again on the new French duties.
What is exempt
| Element | Treatment | What HR has to do |
|---|---|---|
| Impatriation bonus — the premium paid for coming to France | Two routes: its actual amount, where the bonus is stated distinctly — or determinable from objective criteria — in the contract, the corporate mandate or a rider drawn up before the employee takes up the position; or, by election, a flat 30% of net taxable remuneration, available even where the contract says nothing. Both are subject to the reference-salary limitation below | Decide which route you are using at the offer stage and draft to match. The flat election means nothing is lost if the contract is silent, but it is not automatically the better result |
| Foreign-workday remuneration — pay for work performed abroad in the employer’s interest | Exempt, but the combined exemption is capped, at the taxpayer’s choice: either an overall cap of 50% of total remuneration, or a cap on the foreign-workday element alone of 20% of taxable remuneration net of the impatriation bonus | Keep a workday record from day one; it is the evidence, and it decides which cap is better |
| Certain foreign-source investment income | Partially exempt during the same period | Employee-side; tell them it exists |
The choice between those two caps is where the optimisation lives, and the better answer changes with the workday pattern. That is a calculation to run on the actual package each year, not a rule to quote.
The reference-salary limitation — it applies to both routes
The exemption, whether taken at the actual amount or through the flat 30% election, is allowed only so far as the remuneration remaining taxable in France is at least equal to that paid for comparable duties by employees of the same company — or, where there is no internal comparator, in similar companies established in France. That floor is the reference salary. Determining it, documenting the method and informing the employee is the employer’s responsibility, and the condition is tested for each year of the regime. On a package that is generous relative to local pay for the role, this — not the headline 30% — is what sets the exemption.
How long it lasts
For positions taken up since 6 July 2016, the regime runs until 31 December of the eighth calendar year following the year the employee takes up the position. Someone starting in March 2026 can benefit through 31 December 2034. Entitlement is kept through a change of role within the host company and a change of employer within the same group; it ends if the employee leaves the group before the term does, even if they stay in France.
The choice HR controls, and its deadline
What is, and is not, lost by waiting
To exempt the bonus at its actual amount, the administration requires it to appear distinctly — or to be determinable from objective criteria — in the contract, the corporate mandate or a rider drawn up before the employee takes up the position in France. That document has a real deadline. What is not true, and is often said, is that a silent contract loses the regime: the flat 30% election is expressly available even where the contract makes no provision for a bonus. So the deadline governs the choice, not the entitlement. Make the choice deliberately, at the offer stage, on the numbers.
A worked example (illustrative figures)
Consider an assignee with net taxable remuneration of €150,000, tax-equalized, with 20% of workdays spent abroad for the employer. With the flat 30% election, €45,000 would be treated as exempt bonus, leaving €105,000 taxable; the foreign-workday share adds to the exemption within whichever cap is chosen. But the exemption only holds to the extent that the remaining taxable remuneration clears the reference salary. If comparable duties in the company are paid €120,000, the exemption is limited so that €120,000 stays taxable — €30,000 exempt, not €45,000. If the comparator is €90,000, the full €45,000 stands. The employer’s equalization cost falls by the French tax on whatever is exempt — for a senior assignee, a figure that runs into the tens of thousands of euros a year, for eight years. The figures are constructed, not a client case; the mechanism is not.
What HR should do, in order
- At the offer stage, check the five-year condition against the candidate’s history.
- Decide which exemption route you are using — the actual amount, documented in the contract or a rider, or the flat 30% election — and draft accordingly. Run both against the reference salary before choosing.
- If you are taking the actual-amount route, get the contract or rider signed before the start date.
- Open a workday record on day one.
- Re-run the calculation each year with the adviser: the cap choice changes with the workday pattern, and the reference-salary condition is tested annually.
- Watch group moves. A transfer within the group keeps the regime; a move to an unrelated employer ends it.
Common mistakes
- Treating it as the employee’s problem — and then paying for it under equalization.
- Assuming a silent contract kills the regime — it does not; the flat election remains. The real cost is losing the choice between the two routes.
- No workday record, so the foreign-workday exemption cannot be evidenced.
- Assuming the five-year condition is met without checking — a prior French internship or a year of study can matter.
- Losing the regime through a corporate restructuring that moves the employee to an entity outside the group.
- Overlooking a returning expatriate who has been more than five years with a group company abroad.
- Quoting the 30% figure to an employee without checking the reference salary, then having to walk it back.
How Expand CPA can help
We check eligibility before the offer goes out, draft the contract clauses with your counsel, run the cap optimisation on the real package each year, and prepare the employee’s French return so the exemption is actually claimed. For US assignees we reconcile it with the US return, where the exempt income is treated differently.
Frequently asked questions
How long does the impatriate regime last?
For positions taken up since 6 July 2016, until 31 December of the eighth calendar year following the year the employee starts.
Who qualifies?
People who were tax resident outside France for the five calendar years before starting, who become French tax resident on starting, and who were recruited from abroad by a company in France — including intra-group transfers, and employees returning to France after more than five years with a group company abroad.
Is the 30% flat exemption guaranteed?
No. It is capped by the reference-salary condition: the remuneration left taxable in France must be at least what comparable duties are paid in the company, or in similar companies in France. The employer determines that figure and is tested on it every year.
Does the bonus really have to be in the contract?
Only if you want it exempt at its actual amount — then it must appear distinctly, or be determinable from objective criteria, in the contract, the corporate mandate or a rider drawn up before the employee takes up the position. The flat 30% election is expressly available even when the contract says nothing about a bonus, so a silent contract does not lose the regime.
Does the employee lose it if they change jobs?
A change of role within the host company, or of employer within the same group, keeps it. Leaving the group ends it, even if the employee stays in France.
Why does this matter to the employer rather than the employee?
Under tax equalization the employer pays the employee’s French tax, so the exemption is the employer’s saving. And the conditions are met in documents HR controls, before day one.
Bringing someone to France?
We will check eligibility and cost the regime before the offer goes out. Our global mobility services for employers.
