The French tax authorities published new comments regarding the impatriate tax regime (article 155B of the French Tax Code) through successive updates of its administrative guidelines (BOI-RSA-GEO-40-10-10 and BOI-RSA-GEO-40-10-20) on April 10 and August 11, 2025. Here are the key points to remember:
Employees or executives returning to France from an overseas assignment
The French tax authorities have supplemented their previous comments, specifying in § 40 of BOI-RSA-GEO-40-10-10 that expatriates returning to their original employer established in France, or to another entity established in France and part of the group, can benefit from the impatriate tax regime (provided all conditions are met). The fact that their employment contract with this French company was terminated, suspended, or amended during or at the end of the assignment period does not affect their eligibility for this tax regime.
For reference, as per article 155B of the French Tax Code, employees and certain executives called from abroad to take up a position in a company established in France are exempt from French taxation on their assignment premium or up to 30% of their compensation.
Through these recent comments, the French tax authorities appear to have expanded the scope of the impatriate tax regime by explicitly including employees and executives returning from their overseas assignment.
It seems appropriate for us to conduct a review of any employees or executives who have returned to France following an expatriation in the past eight years or who are planning to return in the near future. This would allow us to jointly explore the possibility of applying the regime retroactively or in the future.
Recruitment from abroad
The French tax authorities have adhered here to the latest case law by specifying in § 80 of BOI-RSA-GEO-40-10-10 that employees applying from abroad for a job offer in France are considered directly recruited from abroad and hence, can claim the benefit of the impatriate tax regime even though the employee initiated the application.
Tolerance measure related to the condition of residency in France
The French tax authorities have confirmed in § 240 of BOI-RSA-GEO-40-10-10 the fact that the tolerance allowing an employee or executive whose household installation occurs later in the year of arrival in France, or the following year, to benefit from a tax exemption on their impatriation premium, is not applicable to foreign passive income (interests, dividends and capital gains), which remain fully subject to tax in France.
For reference, as per article 155B of the French Tax Code, employees and certain executives called from abroad to take up a position in a company established in France are tax-exempt on 50% of their foreign passive income (interests, dividends and capital gains), provided that the foreign country or territory signed a tax treaty with France that includes an administrative assistance clause to combat tax fraud or evasion.
Flat exemption of the impatriation premium (up to 30%)
The French tax authorities have adhered to the latest case law by specifying in § 80 to 102 of BOI-RSA-GEO-40-10-20 that the ability to opt for a flat exemption, which was initially reserved for employees and executives directly recruited from abroad, has been extended to cases of intragroup mobility, provided that the position was taken up after November 15, 2018.