IMPATRIATION OR WHEN A FRENCH CITIZEN GOES BACK TO FRANCE

Impatriation is a tax regime that was created for the benefit of French citizens who are tax residents abroad and also called “expats” who want to return to France permanently. 

This status aims to encourage French citizens to return to live in France after their expatriation.

Thus, an impatriate will be able to avoid paying French taxes when returning to France by benefiting from an exemption on certain sources of French and foreign income.

In this article, we will go over this impatriation regime point by point.



  • The nature of the exempt income
  1. the impatriation bonus, i.e. the additional remuneration directly linked to the exercise of a professional activity in France;
  2. the part of the remuneration relating to the activity carried out abroad and made in the interest of the employer within the framework of an intra-group mobility;
  3. 50% of the foreign income flowing from investment capital[1];
  4. 50% of income from intellectual or industrial property from foreign sources[2];
  5. 50% of the gains from the sale of foreign securities and corporate rights;
  6. allowances and reimbursement of professional expenses[3]; and
  7. housing allowance, tax-equalization allowance[4] and other allowances relating to the impatriate employees. [5]

This status also allows to deduct from taxable income a portion of the contributions paid to supplementary pension plan and complementary schemes to which the impatrié was affiliated before arriving in France.

  • The conditions to benefit from the tax exemption

In order to obtain these exemptions, the impatrié must meet several criteria concerning his employment:

– He must be an individual employee or manager ; and

– He must have been transferred in the context of intra-group mobility by a company whose head office is abroad for a position in a company in France having a link with the foreign company; or

– have been recruited directly from abroad as part of an external recruitment by a company in France[6]

Furthermore, the impatriate will have to meet two cumulative conditions regarding tax residence, namely:

– a condition of non-resident tax for 5 years before returning to France; and

– a condition of tax domiciliation in France [7] i.e. having their home or the main place of residence in France and exercising a professional activity there on a principal basis at the time of return to France. 

  • The practical implementation of the impatriation regime and its duration

This particular scheme will only appl to the years from which the impatriate:

– has his home or main place of residence in France; and

– pursues a professional activity as a principal occupation.[8]

It is accepted that the regime applies for the year in which the employee takes up his position in France if the household moves to France at the latest before the end of the calendar year following the year in which the employee takes up his position. 

Finally, the period of application of the regime is 8 years and is fixed at a maximum until December 31 of the eighth calendar year following the taking up of duties in the host company for any taking up any duties from 6 July 2016. 



  • Focus on the impatriation premium

In order for the impatriation bonus to be tax free, the employee/manager must be taxed in France on an amount at least equivalent to the remuneration received in the same company by an employee who is not impatriated for a similar position. 

In addition, the impatriation bonus must appear separately in the employment/corporate contract/mandate or if applicable, in an amendment, drawn up prior to taking up employment in France.

In order for the amount of the bonus to be exempt, that amount must be determined or determinable by objective elements stipulated in the employment contract.

The limited exempted amount of the impatriation bonus

In the case of an external recruitment, and if the amount of the bonus is not established in the employment contract, the impatriation bonus may be evaluated on a lump sum basis and deemed to be equal to a maximum of 30% of the total compensation.

Regarding impatriates in the context of intra-group mobility and if the amount of the bonus is not determined, it must be determinable on the basis of objective and precise criteria mentioned in the employment contract.

On the other hand, if the impatrié took office in the context of an intra-group mobility after 15 November 2018, the assessment of the exempted amount can be made using the lump-sum assessment for external recruitment. 

A cumulation of exemption from the impatriation premium possible but also capped

The ceiling on the exemption from the impatriation bonus can be combined with an exemption from remuneration related to an activity carried on abroad, but this combination is capped at the taxpayer’s discretion:

  • It can be an overall cap, in which case the exemption from the impatriation bonus and the portion of remuneration corresponding to the activity carried out abroad may not exceed 50% of the total remuneration;
  • It can be a cap on the exemption of the remuneration corresponding to the activity carried out abroad, in which case the exemption of this part may not exceed 20 % of the taxable remuneration of the person concerned net of the impatriation bonus.

[1]Provided that the payment of such income is made by a person established outside France in a State or territory that has entered into a Tax treaty with France which contains an administrative assistance clause to combat tax fraud or evasion

[2]under the same condition as set out in 1

[3]Article 81 para 1 of the French General Tax Code

[4] This involves reimbursing all or part of the cost of the housing that constitutes the impatriate’s residence in France and the tax and social security residence in France and the tax and social security contributions paid in France.

[5]Article 155B of the French General Tax Code

[6]The benefit of the regime is not subject to the condition that the employment contract or its amendment mentions the duration of employment in France, or that the employment contract be concluded for a fixed term.

[7]As provided by articles 4a) and 4b) of the French General Tax Code.

[8]Non compliance with one of these cumulative conditions in respect of a year does not exclude the benefit of the regime in respect of the years – previous or subsequent – for which they are met.

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