News - France

France - March 2010

France: New French employer super-tax on banker's bonuses

France is planning to introduce a new tax for companies on bonus payments to bankers and traders.

Draft legislation is being considered by the French Parliament to introduce a specific tax on bonuses paid to bankers and traders in 2009.

Under the proposed new legislation, banks and financial institutions would be subject to an exceptional tax of 50% on bonus payments accruing in 2009 in excess of € 27,500 to certain employees.

Further details

The tax would be charged on the variable element of remuneration paid to professionals working in financial markets whose activities have a significant impact on their employing company’s exposure to risk (“traders”). The tax would cover all items of performance related remuneration and compensation paid to qualifying employees. Where payment was made in the form of stock options or free shares, the tax would be calculated by reference to the open market value of the shares on the grant date.

However, payments made pursuant to standard collective schemes such as non-mandatory or mandatory profit sharing schemes would be excluded from the new tax.

It is proposed that the tax will be due on bonus payments which relate to the year 2009, irrespective of when the payment effectively occurs.

The tax on bonuses already paid must be declared and paid within the 25 days of the month following the date on which the new legislation becomes effective. For bonus payments accrued in 2009 but which are made after the new law becomes effective, the tax payment will be due before the 26th of the month following the bonus payment.


In anticipation of the new legislation, bonus discussions that are generally held in February after company financial periods end will now have to take this proposed new legislation into consideration. As the tax will apply to 2009 bonuses irrespective of when paid, simply postponing the bonus payment will not avoid the tax charge.

It is not yet clear whether bonuses subject to the new tax will still be subject to employment social security contribution and individual income tax as ordinary salary. However, as the new tax will be due from the employer, it is probable that it will be due in addition to the standard tax and social levies on employment income.

For further information or to discuss any of the issues raised please contact Pascal Ngatsing ( on +33 1 53 93 94 00.

This article was produced by, and re-produced with kind permission of, our correspondent firm in France, Société Juridique et Fiscale Franco-Allemande Selas (SOFFAL).