French inpatriate tax regime 2026: exemptions, conditions and planning

France has designed a tax regime specifically aimed at attracting international talent: the inpatriate tax regime, codified in article 155 B of the Code général des impôts (CGI). This scheme allows executives, managers and experts recruited from abroad to benefit from substantial income tax exemptions for up to 8 years, alongside advantages on foreign-source passive income and wealth tax.

In 2026, this remains one of France's strongest tools for competing with London, Amsterdam and Singapore in the war for international talent — particularly in financial services, technology and consulting. But the regime raises precise questions: who qualifies, what exactly is exempt, how does it interact with international tax treaties, and what planning steps are required?

The inpatriate regime (art. 155 B CGI) allows anyone recruited from abroad who has not been tax-domiciled in France for the 5 calendar years preceding their appointment to exempt their inpatriation premium from income tax (at actual cost or via a 30% flat rate of net remuneration), to exempt the fraction of salary corresponding to work performed outside France, and to exempt 50% of certain foreign-source passive income — with a combined ceiling of 50% of total taxable remuneration, running until 31 December of the 8th year following the start date.

Personal eligibility conditions#

Three cumulative conditions must be met.

First, the beneficiary must not have been tax-domiciled in France during the 5 calendar years preceding the date on which they take up their duties. This is assessed under article 4 B of the CGI: principal household, centre of economic interests, habitual residence. A French national who has lived abroad for 5 years is not excluded — nationality is irrelevant.

Second, the person must be recruited from abroad: either directly by a French company, or seconded by a foreign company to an entity of the same group established in France.

Third, they must carry out their professional activity in France from the date of appointment, with France-based activity representing more than half of annual working time.

Who is covered?#

The regime applies equally to employees, director-assimilated employees (SAS presidents, minority SARL managers paid a salary), and self-employed professionals, provided the origin conditions are met.

The most frequent profiles seen in practice: CFOs or MDs recruited from the UK or the US, engineers from Asia or Germany, start-up founders returning from Singapore or Canada, and banking executives posted to Paris after a secondment within the EU.

Watch point: an employee initially seconded to France (under A1 certificate) who is offered a local contract mid-assignment must have their situation carefully analysed. The start date of the local contract may trigger a new 5-year look-back period if prior tax domiciliation is questioned.

The regime applies until 31 December of the eighth calendar year following the year duties commence. For an appointment in 2025, the exemption runs until 31 December 2033.

This ceiling was extended from 5 to 8 years by the Finance Act for 2021 (article 48). The duration is a maximum: the regime ceases if the beneficiary expressly waives it or if eligibility conditions are no longer met. Once waived, the option cannot be reinstated.

The inpatriation premium#

Benefits linked to inpatriation — additional remuneration paid by reason of the assignment in France, such as accommodation costs, school fees, relocation costs and an installation allowance — are exempt from income tax.

Flat-rate option: where the premium is not precisely itemised, it is deemed equal to 30% of total net remuneration (article 155 B, II of the CGI), provided the flat rate is not lower than actual costs.

Actual cost option: where actual inpatriation costs are documented and exceed 30% of total remuneration, it is possible to claim their precise amount. The documentary burden is greater and audit risk higher. The 30% flat rate is the safer and more practical choice for most inpatriates.

The fraction attributable to activity performed outside France#

Where the inpatriate carries out part of their work outside France — international assignments, professional travel — the fraction of remuneration corresponding to days worked abroad is also exempt from income tax. It is calculated pro rata to foreign working days over total working days in the year.

Cumulative ceiling: the combined total of both exemptions (inpatriation premium + foreign fraction) cannot exceed 50% of total taxable remuneration.

An alternative is available: the inpatriate may choose to cap the foreign fraction alone at 20% of taxable remuneration (after deducting the inpatriation premium), when this is more favourable.

Summary table: employment remuneration exemptions#

50% exemption on certain foreign-source passive income#

Inpatriates also benefit from a 50% exemption on investment income, intellectual and industrial property income, and capital gains from the disposal of foreign-source securities (article 155 B, I-C of the CGI).

This exemption operates independently of the 50% ceiling applied to employment income. It is particularly significant for executives holding stakes in foreign companies or receiving dividends from abroad.

What the tax authority looks at: dividends paid by a foreign company controlled by the inpatriate may be recharacterised if distributions appear to have been deliberately timed to exploit the exemption. Prior review with your adviser is strongly recommended.

IFI (wealth tax) exemption for 5 years#

Inpatriates who become liable to the impôt sur la fortune immobilière (IFI — the French real estate wealth tax) are taxable, for the first 5 years of their French tax domiciliation, only on real estate assets located in France. Assets held outside France are excluded from the IFI base during this period.

This provision is frequently overlooked and can represent a very substantial saving for persons with significant foreign real estate holdings.

Marc is a CFO recruited in January 2026 by a Paris-based company after 6 years in the United Kingdom. His gross annual remuneration in France is €200,000, including an inpatriation premium of €40,000 (20% of total). He also carries out 60 days of international assignments over 220 working days in the year.

Exempt base calculation:

• Inpatriation premium: €40,000 (cross-check: 30% × €200,000 = €60,000; the flat rate would cover more, but actual costs are €40,000 here)
• Foreign fraction: 60 / 220 × (€200,000 − €40,000) = 60 / 220 × €160,000 ≈ €43,636
• Total exempt: €40,000 + €43,636 = €83,636
• Ceiling check: 50% × €200,000 = €100,000 → ceiling not reached
• Taxable base remaining: €200,000 − €83,636 = €116,364

Without the regime, Marc would have been taxed on €200,000. The regime exempts 41.8% of his remuneration. In addition, Marc holds a stake in a UK company: dividends received from that foreign source benefit from the 50% passive income exemption.

Real-world case: an American co-founder of a Paris fintech, returning after 7 years in the United States, had not been advised about the inpatriate regime before signing his SAS president contract. He discovered it at his first meeting with Hayot Expertise and was able to file the option in his 2025 return, securing the full benefits for the 8 years ahead.

The inpatriate tax regime is entirely separate from the social security regime. Income tax exemptions do not automatically generate social security contribution exemptions.

An inpatriate may, under certain conditions, elect to remain affiliated to a foreign social security scheme:

• under a secondment covered by a bilateral social security convention;
• via EU Regulation CE No. 883/2004 for EU/EEA nationals;
• through a special agreement with the relevant authority.

Where the inpatriate maintains foreign affiliation, employer contributions paid to the foreign scheme are excluded from the French social security contribution base (article L. 242-14 of the Code de la sécurité sociale). This can represent a meaningful cost saving for the hiring employer.

The exemptions under article 155 B of the CGI are French domestic rules. They apply unless a bilateral tax treaty supersedes them by granting France exclusive taxing rights or by allocating taxing rights to the source state.

The most complex situations arise with:

• US nationals: the United States taxes its citizens on worldwide income regardless of residence. The inpatriate regime reduces French tax, but does not remove US reporting obligations (FBAR, FATCA). See our guide on FATCA/FBAR for US nationals in France.
• UK nationals: the Franco-British tax convention includes specific provisions on employment income partly performed outside France.
• UAE nationals: the absence of income tax in the UAE raises questions about effective tax domiciliation before arrival in France.

A prior analysis of the international tax situation is always recommended, particularly for executives considering relocation or the management of their fiscal domicile.

The inpatriate regime is not automatic. The beneficiary must request it in their first French income tax return by reporting exempt income in the designated boxes on form 2042.

Documents to prepare from day one#

• Employment contract or engagement letter specifying the start date and the condition of recruitment from abroad;
• Proof of tax residence outside France for each of the 5 preceding calendar years (foreign tax assessments, tax residency certificates, domicile documents);
• Detailed calculation of the inpatriation premium or receipts supporting actual costs, if the actual-cost option is used;
• Log of days worked in France and abroad if the foreign fraction is claimed — this must be maintained throughout the year.

Failing to build this file from day one is one of the most common and costly mistakes. In a tax audit, the absence of proof of prior foreign tax domiciliation can result in the entire regime being disallowed, with back taxes, penalties and interest.

Flat-rate premium versus actual costs. For an executive whose actual inpatriation costs (expatriate housing, international schooling, double household) exceed 30% of remuneration, the actual-cost option is mathematically superior. However, it carries greater audit exposure. In the majority of cases, the 30% flat rate is chosen for its simplicity and legal certainty.

Combining the regime with a PER (retirement savings plan). Inpatriates can combine article 155 B exemptions with deductions for contributions to a Plan d'Épargne Retraite, within the standard French ceilings. In the early years of the regime, the effective tax rate can fall well below 10%.

Planning ahead for the end of the regime. Well before the 8-year ceiling, a full review of the remuneration structure is essential: salary versus dividends, foreign assets to be transferred, foreign life insurance policies, stock options or BSPCE whose liquidity window coincides with regime expiry. This planning work is part of a director wealth management review.

The underestimated risk: the missed option declaration. Since the regime is not automatic, an inpatriate who fails to correctly report exempt income in the first year may lose the benefit for that year, with no retroactive remedy once the legal deadlines have passed. This point deserves careful attention when an executive first arrives in France.

Updated 2026-06-14. This article is for information purposes and does not substitute for personalised advice. For your specific situation, consult a chartered accountant (expert-comptable) registered with the Ordre des Experts-Comptables.