In order to encourage its expatriates, who left France to live in another country, to come back in France, the French government has implemented a favorable tax regime: Régime des impatriés.
The regime is regulated under the article 155B of the French general tax code which provides a special tax regime for a limited period for employees and managers called by a company established in France to occupy a position in France.
A French impatriate is a person who lived outside of France for tax purposes for at least 5 years and who is going to occupy, in a company established in France, a job as an employee or manager.
Conditions for the Régime des impatriés:
To benefit from the special tax regime, the employee must meet a certain number of conditions, as listed below:
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He must have been domiciled outside France for tax purposes during the five calendar years preceding his first day at work;
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He must be called from abroad to take up employment in a company established in France according to one of the two below situations mentioned:
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either he is called to come and work in France as part of intra-group mobility; or
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he is directly recruited abroad by a company established in France.
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The job that the impatriate will occupy must be exercised as a main activity;
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He must become a French tax resident from the year of his first day at work in France; and
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He must have his main place of residence or home in France.
Benefits offered by the Régime des impatriés
The régime des impatriés gives the possibility to exempt fully or partially from income tax the following income under certain conditions:
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impatriation bonus;
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the part of the remuneration relating to the activity exercised outside France; and
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movable capital, gains made, social rights and income from intellectual property.
To make France more attractive, the French government has also implemented tax benefits regarding real estate wealth tax (impot sur la fortune immobilière).
Indeed, individuals who were not French residents for tax purposes during the five calendar years prior to the year in which they establish their tax residence in France, are liable to the real estate wealth tax (impot sur la fortune immobilière) only on property and real estate rights located in France with no conditions regarding employment.
The regime applies for each year when the taxpayer is resident in France for tax purposes up to 31 December of the fifth year following the year when the taxpayer set up his tax domiciliation in France.
Where applicable, this partial real estate wealth tax exemption applies without prejudice to the special income tax regime which is specific to expatriates.
Please note that taxpayer will be subject to real estate wealth tax if the net value of his estate exceeds €1.3 million. This estate includes all property and rights held directly and indirectly on 1 January. Some properties are partially or totally exempted. Some debts can be deducted from the net value of the estate before tax.
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