The Tax and Social Benefits France Offers to Expatriates Moving to France

1. Temporary Exemption from French Real Estate Wealth Tax (IFI) for Foreign Assets

Inbound tax residents benefit from a five-year exemption from IFI (Impôt sur la Fortune Immobilière) on real estate assets located outside France, provided they have not been French tax residents during the previous five calendar years.

Scope

The exemption applies as long as the individual maintains their tax residence in France, and only up to 31 December of the fifth year following the year of arrival.

Example

A person relocates to France and owns property in Germany worth €2 million. They buy an apartment in Paris worth €1.5 million, financed by a €1 million mortgage. Only the net French asset (€500,000) enters the IFI base. Since it is below the €1.3 million threshold, the individual is not liable to IFI during the exemption period.

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2. Temporary Exemption from Mandatory French Pension Contributions

Inbound employees may benefit from a temporary exemption from French basic and supplementary pension contributions, for a period of three years, renewable once (article L. 767-2 of the French Social Security Code).

Eligibility Conditions

• The employee must not have been affiliated to a French mandatory pension regime during the five previous calendar years (except for marginal or student activities).
• They must contribute at least €20,000 per year to a qualifying retirement plan—either foreign or domestic, public or private.

Procedure

• The exemption request must be submitted at least 60 days before the employee starts working in France.
• The employer must complete and sign the official form alongside the employee and submit it to URSSAF.
• Late filings trigger French contributions by default, but a refund may be requested upon retroactive approval.

Note: This exemption does not entitle the individual to any future French pension rights.

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3. Tax Deduction for Contributions Paid to Foreign Social Security Systems

Some inbound workers remain affiliated with a foreign social security regime, under European coordination rules (Regulations (EC) No 883/2004 and No 987/2009) or bilateral agreements.

Key tax benefit

Social contributions paid abroad to a legal social security system, pension scheme, or complementary insurance are tax deductible from taxable income in France (articles 83, 1°-0 bis and 2°-0 ter of the French Tax Code). This can significantly reduce income tax liability.

Countries covered

This applies within the EU and to a large network of partner countries: United States, Canada, United Kingdom, Japan, Switzerland, Morocco, Tunisia, and many others (see full list in the article above).

Careful legal review of the applicable convention is essential, as gaps in coverage may trigger French contributions despite the foreign affiliation.

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4. Exemption from the Payroll Tax on Impatriation Bonuses

Since 6 July 2016, French employers can benefit from a partial payroll tax exemption (taxe sur les salaires) on impatriation bonuses paid to eligible employees (article 231 bis Q of the French Tax Code).

What is exempted?

• Explicit impatriation bonuses mentioned in employment contracts or addenda;
• Or, upon election, 30% of the gross salary (excluding profit-sharing or savings plans) can be treated as impatriation income and excluded from the payroll tax base.

This measure enhances the competitiveness of French companies in attracting international talent, by lowering total payroll costs.

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5. Making France more attractive to global talent

Taken together, these tax and social advantages are powerful strategic levers for companies seeking to attract and retain international talent in France. While technical in nature, they offer substantial value when properly implemented.

At TaxLhab, I regularly support companies and executives in structuring compliant, optimised inbound strategies. My assistance includes technical analysis, documentation review, and coordination with HR and payroll teams to ensure secure and effective implementation.

Need support with inbound employee planning or executive relocation?

Reach out to me directly at sandro.assogna@avocat.fr : I’ll be happy to guide you with clarity, rigour, and a tailored approach aligned with your operational and legal needs.

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S.ASSOGNA

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