Impatriation bonus: actual amount or 30% flat rate

What the impatriation bonus is — and what it is not

The impatriation bonus corresponds to the supplements to remuneration, in cash or in kind, directly linked to the temporary exercise of the professional activity in France. It is exempt from income tax for its actual amount (CGI, art. 155 B, I-1; BOI-RSA-GEO-40-10-20, § 40). Only these supplements are exempt: the base salary and the other components of the package remain taxable under ordinary rules.

The DGFiP states it unambiguously: being recruited by a French company after five years abroad is not enough. It is for the employee to demonstrate that an additional element of remuneration was expressly linked by the employer to the transfer of their activity and home to France (fact sheet « Le régime des impatriés », impots.gouv.fr). Hence the importance of the contractual drafting.

Route 1: the actual bonus, set in the contract before the start of duties

When set for its actual amount, the bonus must appear separately in the employment contract or the corporate office agreement — or in an addendum — drawn up before the start of duties in France (BOI-RSA-GEO-40-10-20, § 60). A bonus added afterwards, by an addendum signed after arrival, does not meet this condition.

The authorities do, however, accept that the bonus may simply be determinable on the basis of objective criteria stated in the contract (§ 70). Accepted examples:

• the provision of housing in France (benefit in kind);
• a bonus set as a percentage of fixed remuneration, of base remuneration including a variable component, or of the variable component alone;
• allowances linked to the impatriation: cost-of-living allowance, tax equalization payments, reimbursements of personal expenses related to the move — provided they qualify as salary supplements linked to the impatriation and not as reimbursements of business expenses exempt on other grounds (art. 81, 1° of the CGI).

Route 2: electing the 30% flat-rate valuation

By election exercised each year in the income tax return, the impatriation bonus is deemed equal to 30% of total net remuneration — net of social security contributions and deductible CSG, before the 10% deduction for professional expenses (BOI-RSA-GEO-40-10-20, § 90). The election is available even where the contract provides for a bonus: the taxpayer chooses each year whichever solution is more favorable.

Who can elect? The 2019 change

The 2019 extension makes the flat rate a safety net for returns organized in a hurry or poorly structured packages: even without a bonus clause, 30% of net remuneration can be exempt. But the flat-rate amount is carved out of the agreed remuneration — it is not added on top. For the same package, an actual bonus negotiated on top of the market salary generally remains more efficient.

Basis of the flat rate: what is in, what is out

• Included: all bonuses and allowances provided for in the contract and taxable under salaries-and-wages rules. The Conseil d'État has held that the basis of the flat rate extends to the taxable portion of a termination payment under the employment contract (CE, 4 October 2023, no. 466714).
• Excluded: amounts and gains from employee savings or employee share-ownership schemes — profit-sharing, stock-option exercise gains, free-share award benefits (art. 80 quaterdecies of the CGI) (BOI-RSA-GEO-40-10-20, § 90).

The safeguard: the reference remuneration

The exemption of the bonus — actual or flat-rate — is conditional on the impatriate's taxable remuneration remaining at least equal to that paid for comparable functions in the same company or, failing that, in similar companies established in France (CGI, art. 155 B, I-1, last para.; BOI-RSA-GEO-40-10-20, § 110). If the exemption brings the taxable salary below this « reference remuneration », the excess is added back.

Official example (BOFiP, § 190)

An executive seconded by a US company receives €200,000 net, including an impatriation bonus of €60,000. The bonus is fully exempt if the reference remuneration in France is €140,000 or less. If the comparable net salary is €150,000, the exemption is limited to €50,000: the taxable salary cannot fall below the French comparable.

Who sets the reference, and how?

It is for the employer to determine the reference remuneration and to substantiate the method, where appropriate through a certificate given to the employee (§ 120 and 160). The authorities accept three accommodations (§ 150): comparison with similar companies even where comparable functions exist internally; use of the lowest of the comparable remunerations observed over the year or the three preceding years; and assessment for the settling-in year alone where the bonus is determined and fixed — this last tolerance being excluded where the bonus is expressed as a percentage of remuneration or valued at the flat rate. The comparison must relate to genuinely comparable functions: for a professional footballer, the reference remuneration is that of players in the same position (CAA Paris, 16 March 2021, no. 19PA00956).

Negotiating the bonus with the employer: the pre-signature checklist

1. Raise the subject early: the bonus is negotiated with the package, not after arrival. Foreign HR departments rarely know the regime — bring them the documentation (our bilingual HR note is designed for this).
2. Arbitrate actual vs flat rate: simulate both routes on the basis of the proposed package, factoring in the reference remuneration and the overall 50% cap (see the exemptions page).
3. Draft before the start of duties: a separate clause, actual amount or objective criteria, dated and signed before the first day of performance of the contract in France.
4. Request the reference remuneration certificate at hiring, rather than in a rush during a tax audit.
5. Document the recruitment channel (intra-group mobility or external recruitment) and the five years of non-residence — see the eligibility page.