The impatriate regime: the employer and HR playbook

Why HR teams — especially foreign ones — get lost

The impatriate regime is a French tax mechanism whose implementation rests largely on HR and payroll acts: a contract drafted before the start of duties, a documented reference remuneration, a correctly completed DSN filing. Yet in an international mobility, these acts are often driven by a global mobility team based in Dubai, London or Singapore that knows neither article 155 B of the CGI, nor the case law on contractual timing, nor the boxes of the French tax return.

The classic result: a generous package, but no identified « impatriation bonus »; an addendum signed three months after arrival; a French payroll that subjects the bonus to withholding at source. Each of these approximations costs part of the benefit — sometimes all of it for pre-2019 situations. This page serves as a roadmap; for a complete, bilingual version that can be sent directly to your employer, see the HR-ready impatriate note.

Step 1 — Before the start of duties: the contract

• Insert the impatriation bonus clause in the employment contract, the corporate office agreement or an addendum drawn up before the start of duties in France (BOI-RSA-GEO-40-10-20, § 60). A quantified actual amount or, failing that, objective determination criteria (percentage of remuneration, housing benefit, etc.).
• Distinguish the bonus from the base salary: an undifferentiated overall envelope does not constitute an impatriation bonus. The DGFiP requires that an additional element of remuneration be expressly linked to settling in France.
• Date and keep: the timeline (signature before the move and before the first day of performance in France) must be provable — it also conditions the eligibility of an employee recruited abroad (see the eligibility page).
• Qualify the channel: intra-group transfer (document the links between entities within the meaning of article L. 233-3 of the French Commercial Code) or external recruitment (document the application and the residence abroad).

Step 2 — Determining the reference remuneration

This is an obligation specific to the employer: it must determine the reference remuneration — that paid for comparable functions within the company or in similar companies established in France — inform the employee of it, and be able to justify the method to the tax authority (BOI-RSA-GEO-40-10-20, § 110 to 160; DGFiP fact sheet). In practice:

• build a comparables file (internal salary grids, sector pay studies) from hiring;
• give the employee a certificate stating the method used — without it, the doctrinal accommodations (external comparables, lowest comparable remuneration, assessment for the settling-in year alone) are inapplicable;
• update the analysis on any change of position.

Step 3 — Payroll, DSN and withholding at source

• DSN: report separately the amount of salaries subject to income tax and the amount of exempt sums, in the « sums exempt under the impatriate regime » field — the total of the impatriation bonus and of the portion of remuneration relating to the activity performed abroad (BOI-RSA-GEO-40-10-20, § 360).
• Withholding at source: the exempt impatriation bonus is outside the basis of the withholding (BOI-RSA-GEO-40-10-20, § 360, remark). A default set-up that subjects it to French withholding creates an undue cash advance for the employee.
• Informing the employee: the employer communicates these amounts to the person concerned (§ 370), who will need them for boxes 1AJ/1DY.

Step 4 — The benefits on the employer side

Payroll tax (art. 231 bis Q of the CGI)

For employers liable to payroll tax (banking, insurance, medical and non-profit sectors, among others), the remuneration exempt under article 155 B is exempt from payroll tax: up to the bonus exempt from income tax or, where the employee elects the flat-rate valuation, up to a 30% fraction of remuneration. The exemption applies under the same domicile and duration conditions as the main regime (CGI, art. 231 bis Q; DGFiP fact sheet « Le régime des impatriés »).

Old-age contributions (art. L. 767-2 of the French Social Security Code)

The impatriate employee can request, under conditions, an exemption from affiliation to the compulsory French old-age insurance schemes (basic and supplementary), which reduces the corresponding contributions — both employee and employer. The request is the employee's to make, but its implementation runs through payroll; the procedure is described by Urssaf. This choice affects pension rights and must be weighed.

Package attractiveness

Properly structured, the regime increases the employee's after-tax net at constant employer cost — a decisive negotiating lever to bring back an executive based in Dubai or Singapore, or to attract an international profile.

What the employee does themselves (and the employer cannot do for them)

• Exercise the annual elections (30% flat-rate valuation, choice of the 50% / 20% cap) by express statement on the income tax return;
• check the pre-filled amount and report the taxable salary in 1AJ/1BJ, and the exempt salaries and bonuses in 1DY/1EY of form 2042 C;
• report foreign-source income (form 2047) and accounts held abroad (forms 3916/3916 bis);
• keep the supporting documents for workdays abroad.

The detail is on the tax returns page.

Typical timeline of a successful return

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