On December 2014, Emmanuel Macron, France’s Economic and Industry Minister, addressed foreign investors and laid out some key reforms that the Government believes are positive steps toward making France a more attractive environment. One of his main priority in the beginning of 2015, is the enactment of the “Loi pour la Croissance et l’Activité” (“Economic Growth and Activity”) Bill, also known as “the Macron Bill” which is currently discussed in the French Parliament (see our article published in January 2015 “How Will the Macron Bill will Boost Foreign Investments in France”).

This Bill addresses several issues, namely on employment and foreign investment. As such, one of the main measures of the Bill which concerns foreign companies consists in extending the current tax exemption system for expatriates.

Since 2004, France has implemented a special tax regime called “le régime fiscal des impatriés“ (“the impatriate regime”) allowing French expatriates, to benefit from a tax exemption on certain conditions when coming back to France.

Under this regime, an employee – whether French or any other nationality – who was considered as a non-French tax resident for at least five years, benefits, when hired in France, from a partial tax exemption during 5 years.

Under the special tax regime, and subject to certain conditions, expatriates can currently benefit from:

  • A total exemption of income tax on any expat bonuses or overseas living allowances that relate directly to professional activities exercised in France.
  • A total exemption of income tax of their remuneration (base salary and bonuses) for any activities performed outside of France.
  • A partial exemption of income tax on ‘passive’ sources, royalties and capital gains arising from the sale of shares in companies established outside of France.
  • A temporary exemption from wealth tax (“Impôt Sur la Fortune”) on assets located outside France.

However, considering difficulties arising from the current regime and namely the fact that if an employee changes his job during the five years following his arrival in France he loses his right his exemption right, Macron has decided to extend this regime and overcome this limitation.

As a result, the Macron Bill proposes in article 86, to maintain the tax exemption when the employee changes jobs within the same company or within the same group during the 5-year-period after his arrival in France.

Considering the 3% average annual growth regarding French people’s mobility, the Government seems to finally have realized the urgency to facilitate expatriation. Let’s hope we do not sway from this direction…


Co-Founder, Partner & Solicitor -
International Corporate Law & Litigation

Benoît, Delcade’s co-founder, is a Paris Bar lawyer and UK Solicitor (London).

Advisor for various embassies, working closely with the firm's team, Benoît offers his services to French and foreign companies requiring cross-cutting strategic and legal support in business law.

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