France’s Inpatriate Tax Regime: updated administrative guidance

France’s inpatriate regime is a strategic tax incentive aimed at attracting professionals and executives to work in France. It typically applies to employees who are recruited by French companies while they are resident outside of France. It offers partial tax exemptions on employment earnings, investment income, and capital gains, making relocation to France more financially appealing.

The regime offers generous allowances and exemptions, including:

• Employment income:
  • Additional remuneration (premium) – payable to the employee because the work is carried out in France.
  • Exemption for non-French duties – applies to non-French duties provided these are carried out solely for the benefit of the French company.
  • Overall exemption cap – The combined exemption for French and non-French duties cannot exceed 50% of total remuneration. However, if the inpatriate premium exceeds 30% of the total remuneration, the exemption for non-French duties is limited to 20% of the total remuneration; in this scenario, the total exemption may exceed 50%.

• Non-French income and capital gains:
  • 50% exemption on certain income paid by a non-French entity, including dividends, interest, income derived from life insurance and capitalisation bond, and income derived from intellectual property rights.
  • 50% exemption on capital gains realised on the sale of shares in non-French companies.

The above exemptions only applies to income tax and capital gains tax. They do not apply to social charges nor social security contributions.

The inpatriate regime applies to individuals who were not residents of France for tax purposes during the five calendar years prior to the taking up of their duties in a company based in France which recruits them.

The maximum period of application for all new employees has been set at 31 December of the eighth calendar year following the taking up of duties in the French company.

Employees applying from abroad.

The French tax code provides that the inpatriate regime applies to employees recruited directly abroad by a company established in France.

For many years, the French tax authorities interpreted this requirement narrowly, taking the view that individuals who moved to France on their own initiative could not benefit from the regime.

On 10 June 2022, the Paris Court of Appeal clarified the position, confirming that the legislation does not exclude individuals who, while living outside France, apply for a job offer in France or are otherwise actively seeking employment in France.

The administrative guidelines were updated on 11 August 2025 to reflect this ruling. As a result, applicants who respond to French job offers from abroad and are subsequently hired may now qualify, even where the recruitment process was initiated by the applicant.

Returning employees

In an update dated 10 April 2025, the French tax authorities accepted that the inpatriate regime may apply to expatriates who return to work for the French company that employed them before their departure abroad. The fact that their employment contract with that company was terminated, suspended or amended during or at the end of their expatriation period does not, in itself, call into question their entitlement to the regime.

Please note this article is for general information. You should not rely on it without advice on the specific facts of your case.

*A calendar year is from 1 January to 31 December