🔹 Introduction
Publication date: October 26, 2025
After several years working abroad, many employees wonder whether they can benefit from the French impatriate tax regime upon their return to France.
This regime, set out in Article 155 B of the French Tax Code, offers, under certain conditions, significant tax advantages for individuals who are called from abroad to take up employment in France.
Originally designed to attract foreign talent, its scope has gradually expanded, raising the question of whether it can also apply to employees returning from expatriation within the same company or group.
Before addressing this question, let’s first look at how the regime works.
⚖️ The French impatriate tax regime
The French impatriate tax regime (Article 155 B of the French Tax Code) aims to attract international talent and senior executives to France.
It applies to individuals who are called from abroad to take up employment within a company established in France, whether:
🔹 as part of a direct recruitment abroad, or
🔹 through an intra-group transfer.
To qualify for the regime, the individual must:
🔹not have been a French tax resident during the five calendar years preceding the start of employment; and
🔹 establish French tax residence upon taking up the new position.
Eligible employees can benefit, from the start of their assignment and for up to eight years, from several income tax exemptions.
💼 Tax exemption for impatriation allowances and related compensation
1/ Exemption for actual impatriation bonuses
The following items are exempt from income tax, provided they are stipulated in the employment contract or in an amendment thereto, and are directly linked to the employee’s transfer to France:
🔹Impatriation bonuses;
🔹Cost-of-living allowances;
🔹Housing allowances or employer-paid accommodation for the impatriate.
2/ Optional lump-sum exemption of up to 30%
Eligible employees may alternatively opt for a lump-sum exemption of up to 30% of their taxable remuneration.
Limits to the exemption :
Whether the exemption is actual or lump-sum, it is capped at the level of the “reference salary”, defined as:
“The remuneration paid for equivalent duties within the same company or, failing that, within similar companies established in France.”
In practice, this reference salary corresponds to the lowest remuneration received by an employee with comparable experience and responsibilities within the same company, or a similar company established in France, during the current year or the three preceding years.
🌍 Tax exemption for the portion of remuneration corresponding to activity performed outside France
When an impatriate employee performs part of their work outside France on behalf of their French employer (missions, business travel, or short-term assignments), the portion of remuneration corresponding to these foreign workdays may also be exempt from income tax in France.
💡 Example: If an employee works 22 days abroad out of a total of 220 working days, they may benefit from a 10% exemption of their total remuneration.
⚖️ Limits to the exemption
The exemption for foreign workdays is subject to a double cap, depending on the option chosen by the employee:
1️⃣ Global 50% option
Under this option, all exemptions available under the impatriate regime (impatriation-related supplements plus the portion of income linked to foreign workdays) cannot exceed 50% of the employee’s total remuneration.
2️⃣ “Foreign workdays” option
Alternatively, the exempt portion of remuneration corresponding to foreign workdays is limited to 20% of the taxable remuneration, calculated excluding the impatriation bonus.
💰 50% exemption on qualifying foreign-source income
In addition, impatriate employees may benefit from a 50% income tax exemption on certain categories of foreign investment income, including:
🔹 interest,
🔹 dividends,
🔹 capital gains from the sale of securities.
🔁 What about returning from expatriation?
An important question has long been raised:
➡️ What about an employee returning to France within the same group, or who maintains a contractual link with the company that previously sent them abroad?
➡️ Should such a situation still be considered as the employee being “called from abroad to take up employment in France” within the meaning of Article 155 B of the French Tax Code?
⚖️ Clarification from the French tax authorities
The French tax authorities have recently clarified the application of the impatriate tax regime to returns from expatriation in an update to their official guidelines (BOI-RSA-GEO-40-10-10 §40, updated on August 11, 2025):
*“Note: Employees concerned may have previously been employed by the company established in France.
The tax regime provided for under Article 155 B of the French Tax Code may therefore apply to individuals who, after an expatriation period, return to work for the company in France that employed them before their departure abroad, or for another company within the same group established in France — provided that all the conditions of the regime are met, in particular the requirement of not having been previously tax resident in France.
The fact that their employment contract with the French company was terminated, suspended, or amended during or after their expatriation period does not preclude the application of the regime.”*
✅ Practical conclusion
The French impatriate tax regime is therefore applicable upon return from expatriation, provided that the employee:
🔹 has not been a French tax resident during the previous five calendar years;
🔹 establishes French tax residence upon returning; and
🔹 is called to perform duties in France, even if this occurs as part of a return within the same group.
This clarification ends a long-standing area of uncertainty and provides greater legal certainty for many returning employees.
🌐 A more attractive regime than in other European countries?
While several European countries have recently tightened their tax attractiveness regimes:·
🇳🇱 Netherlands – limitation of the well-known
30% ruling;
🇬🇧 United Kingdom – abolition of the
non-domiciled resident regime;
🇮🇹 Italy – stricter conditions under its preferential regime.
👉 France, on the other hand, is seeking to strengthen its attractiveness by continuing to expand the scope of the impatriate tax regime. This approach reflects a clear intention to encourage the long-term settlement of international talent and to maintain the country’s competitiveness in an increasingly competitive European environment.
💡 The French impatriate tax regime fully applies to employees returning from expatriation, provided that all eligibility conditions are met.
Returning to France after a period abroad?
Find out if you can benefit from the regime with my free eligibility test:
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