Impatriate in France: Tax Regime, Benefits, and Key Rules

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Are you an impatriate? Are you considering returning to your home country or relocating to another country for professional reasons? This is an important decision that requires access to accurate and complete information. This guide explains what impatriation means, how it impacts taxation, and the key factors impatriates should consider before moving.

What Is Impatriation?

Impatriation refers to the situation in which an individual moves their residence from one country to another, typically to work at the headquarters of a company seeking specific international skills. Once relocated, the employee becomes an impatriate and is subject to the tax laws of their new country of residence rather than those of their home country.

Expatriate vs Inpatriate

A company’s headquarters represents its main operational base.

An expatriate is usually transferred away from this home base to work in a subsidiary abroad and support international operations.

An impatriate, on the other hand, is recruited or transferred to the company’s headquarters country. Rather than moving outward from the home country, impatriates relocate into it to contribute their expertise directly at the core of the organization.

Why Is Impatriation Encouraged? inpatriate

Impatriation is promoted by many countries because it strengthens national economies by attracting skilled professionals, expertise, and innovative ideas. It also helps enhance a country’s international reputation.

Following Brexit, France identified a strategic opportunity to attract highly qualified professionals across Europe. As a result, the country introduced measures to make relocation easier for skilled workers.

This explains why France and other countries offer incentives to impatriates, including tax advantages and financial support. The French government, in particular, introduced new legal frameworks and tax regimes to encourage senior executives and leaders from abroad to relocate and contribute to the French economy.

How Does Impatriation Affect Taxation?

An impatriate becomes subject to the tax laws of their country of residence. This means income and assets are taxed according to local regulations, which may result in higher or lower tax liabilities than in the home country.

Under French law, the impatriate tax regime offers a major advantage: eligible individuals may benefit from an income tax exemption on up to 50% of their remuneration. This applies to employees or executives who were not tax residents of France during the previous five years before taking up their position in France.

The Impatriate Tax Regime inpatriate

To attract international talent, France implemented a favorable tax regime for impatriates, codified under Article 155 B of the French General Tax Code. This regime was introduced by Law No. 2008-776 of August 4, 2008, and provides income tax exemptions to qualifying employees recruited by French companies.

This regime applies to two categories of impatriates:

  • Individuals directly recruited from abroad by a French company

  • Individuals working for a foreign company within a French business structure

The following income items may benefit from partial or total exemption under the impatriate regime:

  • Impatriation bonuses or premiums, provided they are specified in the employment contract or documented before starting work in France, or alternatively fixed at 30% of total net remuneration

  • The portion of salary linked to professional activities carried out abroad in the employer’s interest (working days outside France)

  • 50% of foreign-source investment income, including interest and dividends

  • 50% of capital gains from the sale of foreign securities

  • 50% of income derived from certain intellectual and industrial property rights from foreign sources

Not Sure How Impatriation Affects You? inpatriate

Impatriate taxation can be complex and varies depending on individual circumstances. If you are unsure how impatriation will impact your tax position, professional advice is strongly recommended.

At ESCEC International, our bilingual accountants and tax specialists support impatriates throughout their relocation journey. Whether you are moving to France or returning to your home country, we help assess the tax implications and guide you through filing and compliance to avoid penalties or errors. Contact us today for a free consultation and personalized support.

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