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Double taxation risk for non-resident executive corporate officers of French companies

Some French jurisdictions recently challenged the criterion of physical presence to allocate the right to tax salaries paid to non-resident executive corporate officers of French companies. According to the Versailles Administrative Court of appeal (October 18 2022, Axa Group Operations),…
Posted on 15th July, 2024
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Exemption of withholding tax obligations for foreign employers of French tax residents

Additional guidelines on the scope and consequences of the measure. Further to our article dated 23rd October 2022, the Finance Bill for 2023 in its adopted version abolished the obligation to withhold wage tax at source some foreign employers of…
Posted on 20th March, 2023
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Fidere Avocats – Labour and employment law

We are proud to announce that FIDERE AVOCATS, one of our CELIA Alliance firms in France, has received excellent rankings for labour and employment law from “Leader’s league”. Leaders League is an international rating agency that have been running for…
Posted on 24th November, 2022
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The Draft Finance Bill for 2023 plans to reduce withholding tax obligations for foreign employers of French tax residents

A new wage tax withholding system has been applicable in France since 1 January 2019, burdening employers with the responsibility of withholding personal income tax from their employees’ taxable salaries and paying it monthly to the French tax authorities. This…
Posted on 23rd October, 2022
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An original organization of working hours in France: “le forfait en jours”

In France, working time regulations may be confusing. Although the legal duration of work is equal to 35 hours per week, exceptions to this rule are numerous. French Labor Law provides for multiple arrangements, including but not limited to a…
Posted on 12th October, 2022
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5 things foreign employers should know about the French inbound expatriate regime

The inbound expatriates tax regime as provided for by Article 155 B of the French tax Code is one of the most efficient tax exemption mechanisms currently in force under French tax law. Beneficiaries of such regime who transfer their…
Posted on 21st July, 2022
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“The Macron Scale” of employment law damages approved by Supreme Court.

“The Macron scale” has been approved by the French Supreme Court.   After Emmanuel Macron’s election in 2017, a scale of damages, also known as the “Macron scale” (“barème Macron”), was introduced into French employment law. The Macron scale provides…
Posted on 21st June, 2022
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Fidere Avocats – New Appointments

Fidere Avocats is pleased to announce the appointment of Marine Clapaud, Vincent Roche and Léa Bensoussan as counsels in the firm. All three provide advice and litigation services on all aspects of labor law to French and international companies: Marine…
Posted on 28th February, 2022
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Fidere Avocats – New Hires

Fidere Avocats is also pleased to welcome Erwane Hadjadj, who will be joining us as a “juriste” after many years as a law professional. Erwane is writing a thesis on the role of the judge in dismissal litigation and is…
Posted on 28th February, 2022
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Fidere Avocats – Updated training packages

Fidere Avocats has reviewed its training packages for clients and now offers: A training cycle on the management of the social and economic committee (which is successor of the French works council)A training cycle on legal news in labor law,…
Posted on 16th February, 2022
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2021 Climate Law – New obligations to inform and consult employee representative bodies in France

On 22 August 2021, the French Parliament adopted the Climate and Resilience Law ("2021 Climate Law"). Since being passed, employee representative bodies must now be informed and consulted on the environmental consequences of any major project considered by an employer.…
Posted on 3rd January, 2022
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Workers posted from the UK to France

As of January 1, 2021, the United Kingdom has been a country outside the European Union. A Trade and Cooperation Agreement (TCA) was signed with the United Kingdom on December 30, 2020. Since January 1, 2021, this agreement has determined…
Posted on 8th January, 2021
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Compliance with the minimum wage in the matter of posting – EU jurisprudence

CJEU, 8 July 2021, aff. C-428/19, Rapidsped : In a preliminary ruling on July 8, 2021 relating to Hungarian drivers performing their work in France, the European Court of Justice, questioned by a Hungarian administrative and Labour Court, ruled on the…
Posted on 8th January, 2021
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Consequences of lockdown and travel restrictions measures: no special treatment for French business travellers and inbound expatriates

As explained in our Q4 2020 newsletter, France entered into various amicable agreements with bordering countries to neutralize the tax consequences of COVID-19 restrictions for cross-border employees. While the application of these agreements was extended until September 30, 2021, France…
Posted on 8th January, 2021
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French Supreme Court Jurisprudence

According to European Union law (Case A-Rosa Flussschiff GmbH, C-620/15, April 27 2017) the regular issuance of an A1 certificate is protection against the criminal offense of undeclared work. The issuing of a regular A1 certificate is a presumption that…
Posted on 4th January, 2021
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Consequences of lockdown measures due to COVID on taxable income for French tax residents

The year 2020 is over but will continue to have many consequences in 2021. As far as French tax residents are concerned, the lockdown measures and movement restrictions imposed over the year by the various governments which prevented many employees…
Posted on 2nd January, 2021
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France improves its attractiveness for inbound expatriates

Employees hired in France or posted to France from abroad may be exempt from contributing to French pension schemes due to France’s effort to transform economic growth and aid businesses. The new ‘PACTE’ (Action Plan for Business Growth and Transformation)…
Posted on 8th January, 2019
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France: A review of 2019’s new wage tax withholding system and its impact for foreign employers

On 1st January 2019, a new wage tax withholding system was implemented in France. This has meant employers are obliged to withhold personal income tax from their employees’ taxable salaries and pay it monthly to the French tax authorities. This…
Posted on 3rd January, 2019
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French president allows tax-exempt bonuses between 11 December 2018 and 31 March 2019

On 24th December 2018 French President Emmanuel Macron passed a law allowing any private employer, including state-owned companies, to pay an exceptional tax-exempt bonus to employees. This is provided their earnings are less than 3,600 euros per month (three times…
Posted on 1st January, 2019
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Changes to the laws governing posted workers in France

Changes to the laws governing posted workers in France A new law passed in September 2018 made some significant changes to the laws governing the registration and reporting of the international posting of workers in France. Limited relaxation of mandatory…
Posted on 11th January, 2018
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Posting workers to France? New duties for host companies

Readers may recall our report on the particular complexities of posting workers into France. Recent legislation imposes additional controls and duties on companies in France which use posted workers (a “Host Company”): Suspension of work: As we previously reported, any…
Posted on 7th January, 2017
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France: Major labour law reforms continue

Labour law reform was a major topic of newly elected President Macron’s election platform, in order to tackle unemployment and inflexible rules on hiring and firing. Following the first round of consultations with trade unions and employers' organizations, the Government…
Posted on 7th January, 2017
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Newsflash: France Tax Alert

The filing deadlines for  2017 income tax returns (income from 2016) in France are approaching fast: May 17th 2017 (paper filing) or, for online filings, May 23rd/30th or 6th June 2017. See table for more details.  Filing deadlines for tax…
Posted on 4th January, 2017
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Posting workers to France? Five things to know before they go

Employers posting staff to France on a temporary basis from another EU country should take note of the Posted Workers Enforcement Directive (the “Enforcement Directive”) which creates particularly onerous new obligations for employers.  This is an EU-wide measure, but implementation…
Posted on 4th January, 2017
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France changes the tax treatment of tax qualifying free share plans – again…

Readers may recall the 2015 ‘Macron Law’ which enhanced the favourable tax and social security treatment of the gains made from certain share incentive awards granted under French qualifying share plans. However, this favourable tax treatment only had a limited…
Posted on 3rd January, 2017
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French Supreme Court Clarifies that Intra-Group Transfers may Continue to be Formalised Through Tripartite Agreements

The background Under French labour law, an employment contract may only be terminated through resignation by the employee, dismissal by the employer or mutual agreement between the parties.  According to a 2014 decision by the French Supreme Court, termination of…
Posted on 11th January, 2016
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France is looking to improve the inbound expatriates regime

With the people of the UK opting to leave the European Union, the French Prime Minister plans to make changes to the inbound expatriate regime to attract UK tax payers to live and work in France.  The French Prime Minister,…
Posted on 9th January, 2016
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New responsibilities for foreign transportation companies in France

On 7 April 2016, executive decree no. 2016-418 to the Macron Act was issued.  It defines the rules for posting road transport employees in France and introduces new responsibilities for foreign transport companies and their representatives in France. It came into force on July…
Posted on 8th January, 2016
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French workers have the ‘right to disconnect’

As part of planned labour reforms, new legislation in France will encourage all companies to create policies to help their employees ‘disconnect from the office’ when they are no longer in the office environment.     The amendment was included in…
Posted on 8th January, 2016
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How to reduce expatriation costs: A French perspective

Sending employees on assignment abroad can be an expensive endeavour, on average traditional expatriate assignments can cost a company approximately 2 to 2.5 times the employees annual salary each year.  However, companies can structure their assignments in various ways to…
Posted on 4th January, 2016
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New withholding tax on employment income announced

The French government has revealed the first details of the new withholding (or income) tax rules that will be implemented from 1 January 2018.  The new arrangements are set to impact significantly on the French employers and those companies with…
Posted on 4th January, 2016
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Simplification of social dialogue with employee representatives

The French Social Dialogue and Employment Act, published on 24 March 2016, facilitates the combination of employee representative bodies in order to improve and simplify discussions, negotiations and joint actions in companies.   What has changed? Prior to the reform,…
Posted on 3rd January, 2016
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New social security rules complicate the treatment of termination payments in France

In French law there are specific social security exemption rules for termination payments, depending on the status and seniority of the worker.  The Social Security Finance Bill for 2016 introduced a discrepancy between the tax treatment of termination payments for…
Posted on 1st January, 2016
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New law to improve social dialogue in France

A new law published in August 2015, aims to improve social dialogue, to improve the quality of life at work and to promote the value of union membership and employees’ collective involvement and representation.  Social dialogue is the process of…
Posted on 10th January, 2015
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Changes to evening and Sunday working, profit sharing and lay-offs

Controversial new laws came into force on 6 August 2015, which amended the laws relating to: work carried out during evenings, Sunday working, profit sharing arrangements; and procedures required in the case of economic lay-offs. The measures are designed to…
Posted on 10th January, 2015
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France improves the tax treatment of tax qualifying free share plans

The new Macron Act, enacted on 7 August 2015, brings various changes to the rules regarding tax qualifying free share plans, both from a corporate and tax standpoint. The new regime provides that the minimum vesting period applicable to conditional…
Posted on 10th January, 2015
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France making headway in the implementation of the Posted Workers Directive

The fight against fraudulent posting of workers has become a major challenge within the European Union (EU) with the publication of the Directive 2014/67 EU on 15 May 2015. Background The 1996 Posted Workers Directive (96/71/EC) entitles posted workers to…
Posted on 9th January, 2015
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French Court agrees with ECJ decision on CSG and CRDS contributions

Following an earlier decision by the European Court of Justice (ECJ), the French Supreme Court has ruled that French employees, who are expatriated to a foreign country within the EU where they pay social security contributions, shall no longer pay…
Posted on 7th January, 2015
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French Court changes rules for calculating tax exemption for foreign business travel

Following a decision by the French Supreme Administrative Court, French tax residents who travel abroad for business may now claim tax exemption on any additional compensation they receive (known as ‘Foreign Service Premiums) up to a value of 40% of…
Posted on 6th January, 2015
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New rules on French unemployment benefits may affect negotiated terminations

New rules for the payment of French unemployment benefits, which were introduced from 1 July 2014, may have an impact on the ability of French employers to negotiate termination packages. Waiting period for benefit payment changed Before the new rules…
Posted on 9th January, 2014
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New law changes some rules for Restricted Stock Units and Performance Shares awards

French law creates a new incentive for companies granting Restricted Stock Units or Performance Shares to all their employees in France. The French Commercial Code provides that companies may grant RSUs or Performance Shares to their employees and corporate officers…
Posted on 7th January, 2014
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Increase of withholding tax on dividends and interest

The rates of withholding tax on dividends and interest have increased with effect from 1 January 2012. Interest and dividends are, as a matter of principle, subject to the standard income tax regime.  They are declared and subject to tax…
Posted on 1st January, 2012
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Exemption from social security contributions on termination payments reduced

The portion of termination sums that may be exempt from employment social security contributions has been further reduced by the 2012 Social Security Financing Law as part of the austerity plan. The exempt termination payment is limited to twice the…
Posted on 1st January, 2012
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Scope of new exit tax further extended

France introduced a new exit tax in 2011 for individuals who have been tax resident in France for at least 6 out of the preceding 10 years who move their tax residency abroad. The exit tax consists of the taxation…
Posted on 1st January, 2012
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Swiss residents may claim reduced withholding tax rates on gains from the sales of French property

It was recently held that Swiss tax residents may claim the 19% withholding tax rate on gains arising on the disposal of French property and that they are not subject to the 33.33% rate. Background Under French domestic tax legislation…
Posted on 1st January, 2012
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French Supreme Court specifies the conditions under which GPS may be used to monitor an employee

It was held by the French Supreme Court that a company had unlawfully used a GPS device to track the company car of one of its employees. Background An employee working as a sales representative was informed by his employer…
Posted on 1st January, 2012
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France introduces several tax restrictions as part of austerity plan

France recently introduced a set of new tax measures as the first part of an aggressive plan to reduce the huge and constantly growing state deficit. The most urgent measures were included in the Second Amendment to the Finance Law…
Posted on 10th January, 2011
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Guidance on the new social security treatment of termination payments issued

The social charges treatment applicable to payments received on termination of employment was substantially modified with effect from 1 January 2011.  Guidance issued in April 2011 clarifies the calculation. The French Social Administration recently issued guidance on the application of…
Posted on 7th January, 2011
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New wealth, trust and exit taxes for individuals but tax on second homes is dropped

The Addendum to the Finance Law 2011 (the Bill) will significantly broaden exposure to French taxation. French wealth tax French wealth tax is currently levied at rates ranging from 0.5% to 1.80% on the portion of net assets exceeding €800,000. …
Posted on 7th January, 2011
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Supreme Court rules on tax exemption for multiple payments for termination of multiple Group positions

The Supreme Court clarifies anti-avoidance provisions. Sums paid to an employee or an executive on the termination of his duties may be tax exempt under certain limitations. A termination payment is tax exempt in whole when it does not exceed…
Posted on 4th January, 2011
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Major consequences for French tax residents who fail to disclose foreign bank accounts

Supreme Court confirms swingeing tax consequences of dealing with undisclosed accounts complies with EU law. French tax residents are subject to a general obligation to declare the details of their foreign bank accounts to the French tax administration.  Failure to…
Posted on 4th January, 2011
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French Tax Residency Test

Supreme Court emphasise importance of source income and non-marital family connections in maintenance of French residence. In a series of recent decisions, the Conseil d’Etat, the French Supreme Court clarified certain aspects of French tax residency test rules, which may…
Posted on 4th January, 2011
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France: Revocation of tax treaty between France and Denmark: practical implications

The French tax administration recently proposed several solutions to reduce the negative consequences of the cancellation of the tax treaty between France and Denmark. Denmark notified the French authorities in June 2008 of its decision to revoke the treaty, signed…
Posted on 12th January, 2010
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France: Tax and social withholdings increases for 2011

Proposals will see increases in income and capital gains taxes, social withholdings, and less attractive treatment for stock options and qualified instruments.  The proposals are to reduce state indebtedness and finance the country’s social system. The developments are included in…
Posted on 12th January, 2010
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France: New France-UK dual tax treaty

The new treaty offers exemptions from French wealth tax and closes avoidance loopholes. France and the UK signed a new tax treaty on 19 June 2009 to replace the current tax treaty which is now more than 40 years old. …
Posted on 10th January, 2009
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France: Golden parachutes: New tax and social security treatment

The tax and social security treatment for termination payments was changed in 2009.  We look at the new rules. Until recently all termination payments (whether paid to employees or executives) were subject to the same tax and social security treatment. …
Posted on 10th January, 2009
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International Assignments: A review of the special tax regime for expatriates

The French expat tax regime offers some very beneficial tax advantages. To make France an attractive location for the assignment of executives and high net worth individuals in multinational groups, several tax advantages have been introduced over the last few…
Posted on 10th January, 2009
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France: Termination of a foreign secondment: Repatriation and reintegration obligation

Obligations for French employers to repatriate seconded employees triggered by business transfers. The temporary cross-border assignment of employees in multinational groups is a common HR management tool. To protect seconded employees against the difficulties that may arise from the termination…
Posted on 10th January, 2009
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France: A review of the special tax regime for expatriates

The French expat tax regime offers some very beneficial tax advantages. To make France an attractive location for the assignment of executives and high net worth individuals in multinational groups, several tax advantages have been introduced over the last few…
Posted on 10th January, 2009
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