|
This chapter is not exhaustive and is limited to broadly outline the tax consequences of the main events occurring when doing business in France. It does not constitute a tax advice or a client - attorney relationship. Materials are not suitable for tax analysis. Visitors are invited to consult a tax lawyer before taking any decision.
 If they are considered as French residents, expatriates are subject to French income tax.
Expatriates arriving in France as of January 1st, 2004, who were not French residents during the last 10 years, will no longer be taxable on their expatriation premium and additional salaries related to the expatriation (Cost of living, taxes, moving expenses….) during 6 years. Healthcare premiums and additional pension premiums paid to the home country, including the company allowance, will be deductible from the French taxable income.
As from January 1st, 2005. the 10 years prior residency test is reduced to 5 years only. This provision applies to employees who started their assignment as from January 1st, 2005.
Expatriates arriving in France and willing to benefit of the expatriate tax regime must elect their tax residency in France as of the day they start their new job.
With respect of allowances covering the additional expenses for tax, social tax, and housing, the beneficiary must choose between the expatriate tax regime and, if applicable, the special tax regime for headquarters or logistic centers.
However the allowance covering the cost related to the temporary expatriation in France remains outside the scope of this anti-accumulation rule.
The income tax exemption will also cover the part of their remuneration related to the activity performed outside France. Such exemption will be limited to 20% of the total remuneration. These rules apply to 2005 revenues.
|
Close
