Remote work abroad: French employee tax and employer obligations in 2026

Remote work abroad keeps French social security up to less than 50% of working time, under the EU framework agreement of 1 July 2023 signed by 23 States and processed by URSSAF with an A1 certificate. Without that agreement, the State of residence takes over from 25% of working time. Salary taxation follows article 15 of the applicable treaty.

Allowing a French employee to work remotely from Lisbon, Brussels, Montreal, Dubai or Casablanca looks straightforward. For the employer, it actually combines payroll, tax, social security, immigration, insurance, local labour law and, in some cases, a permanent establishment exposure that engages the French company. The topic has changed nature since 2022: post-Covid generalisation of remote work, entry into force on 1 July 2023 of the EU framework agreement on cross-border telework (signed by 23 States as of 26 July 2026, across the EU, the EEA and Switzerland), the update to the OECD Model Tax Convention adopted by the Council on 18 November 2025, which deals specifically with home-based telework, and French Conseil d'Etat case law on article 4 B of the French Tax Code make a structured analysis unavoidable before departure. At Hayot Expertise, we regularly meet executives who only discover those obligations six to twelve months after an employee has left, when the first social or tax filing reveals a coverage gap, a local contribution due or a taxable presence created. The 2026 golden rule is simple: no international remote work authorisation should be signed without a written, dated qualification file validated by payroll and tax.

Remote work abroad is qualified along four cumulative dimensions: duration (one-off, partial, durable, de-facto expatriation), country (EU/EEA/Switzerland, treaty country, non-treaty country), employee status (French or foreign tax resident, EU or non-EU national) and function nature (support, technical, sales, executive, contract signing). On the social security side, Regulation (EC) No 883/2004 sets the principle of unique applicable law: an employee in principle falls under the social security of the country where work is physically performed, unless under detachment (article 12, capped at 24 months) or the telework framework agreement (up to 49.9% of working time in the country of residence, provided both States are signatories). The A1 certificate issued by URSSAF Caisse Nationale evidences continued French social security affiliation. On the tax side, article 4 B of the French Tax Code defines French tax residence through three alternative criteria (home or principal stay, main professional activity, centre of economic interests); the 183-day rule of article 15 of the treaties decides where the salary is taxable, while residence itself is settled by the ranked tests of article 4 (permanent home, centre of vital interests, habitual abode, nationality, then mutual agreement). On the employer side, the OECD (Model updated on 18 November 2025) recognises that the physical presence of an employee performing key functions in another State may, in some cases, create a permanent establishment of the French company, triggering local taxation of an attributable share of profit. The cost of a catch-up depends on the country and on how long the situation lasted: retroactive local social contributions, local withholding tax, corporate tax where a permanent establishment is found, surcharges and local fees add up, and the period recovered can span several financial years.

Social security thresholds: where affiliation switches#

The 25% threshold is the substantial part test of article 14(8) of Regulation (EC) No 987/2009, assessed on working time and/or pay. The reference period is 12 calendar months (article 14(10) of the same Regulation). The framework agreement, by contrast, looks only at working time and disregards pay.

• Destination country, expected duration, day-by-day calendar and actual telework address (lease or hosting evidence).
• Employee administrative status: nationality, residence permit, right to work in host country (digital nomad visa, work permit, EU exemption).
• Functions actually performed: back-office support, development, sales, negotiation, signing, representation: each category carries a different risk profile.
• Social security: A1 form request through the URSSAF employer online service, before departure, choice between article 12 detachment, article 13 multi-activity or article 16 telework framework agreement.
• Employee tax: keep or lose French tax residence (article 4 B CGI), PAS French withholding, application of bilateral treaty, possible dual filing.
• Payroll: contractual decision (temporary amendment, mission letter, local contract, EOR), keep French payslip or not, possible gross-up for additional contributions.
• Employer: permanent establishment analysis under OECD article 5 (fixed place, duration, authority to conclude), possible local registration, employer withholding, services VAT.
• Insurance and health: international medical cover, CFE outside EU, complementary disability cover, extended professional liability, repatriation.
• Local labour law: working time, leave entitlements, mandatory provisions (Spain, Ley 10/2021 of 9 July 2021 on remote work, written prior agreement required from 30% of the working day over three months; Portugal, Lei n.º 83/2021 and its duty to refrain from contact; Germany, BetrVG), discipline and dismissal rules.
• GDPR and IT security compliance: international data transfers, encrypted remote access, corporate equipment, signed remote work charter.

Illustrative case type (representative example). The parameters and amounts below are working assumptions, not a real file. A French software publisher SME (42 employees, EUR 6.8m revenue, Paris 8th arrondissement headquarters) allowed in September 2024 its customer success lead to work remotely from Barcelona six months a year, without formalising the file. The employee, originally a French tax resident, moved his family to Spain in March 2025. Cumulative consequences as of Q1 2026: (1) reclassification of his tax residence by the Spanish tax authority under the France-Spain treaty of 10 October 1995 (stay > 183 days, permanent home in Spain, centre of economic interests shifted); (2) retroactive affiliation to Spanish Seguridad Social over 12 months (employer contributions of roughly 31% to 32% of gross salary, applied to a capped base, i.e. an order of magnitude close to EUR 18,000 on a EUR 60,000 gross, to be confirmed with local counsel); (3) obligation for the SME to register with the Tesorería General de la Seguridad Social and the Hacienda as employer without establishment, with IRPF withholding, the rate of which combines a national scale and a regional component that varies by autonomous community; (4) unfavourable permanent establishment analysis because the employee was also handling Iberian key-account prospecting, creating a Spanish corporate tax exposure on the attributable margin. The catch-up then combines three items: retroactive Spanish social contributions and their surcharges, local legal and accounting fees, and a Spanish corporate tax provision for as long as the elimination of double taxation is not settled with the French administration. The same employee, framed from the outset by a telework framework agreement processed by URSSAF and capped below 50% of working time, together with an amendment forbidding sales signing in Spain, would have triggered no additional charge.

Our method at Hayot Expertise rests on three complementary pillars that we deploy for every executive consulting us on international remote work. First pillar, the written qualification grid: a matrix crossing country, duration and function, with an automatic decision "authorised without formality", "authorised under A1", "authorised under framework agreement", "switch to EOR" or "motivated refusal". This grid becomes an HR policy signed by management and annexed to the internal rules. Second pillar, the dated evidence file before departure: copy of the A1 or framework agreement request filed with URSSAF, contractual amendment specifying the authorised country, maximum duration, express ban on signing or negotiating locally for non-sales functions, early return clause in case of regulatory change, and a monthly presence calendar to be completed by the employee. Third pillar, shared payroll-tax follow-up: we coordinate with the payroll manager (internal or outsourced) quarterly day verification, production of correct payslips and adjustment of the French PAS withholding. Registered with the Ordre des Experts-Comptables de Paris Île-de-France, we systematically have the host-country reading validated by a local adviser before the contractual amendment is signed. Our conviction is that international remote work belongs to HR internal control, not to ad-hoc reactions to employee requests.

The most underestimated risk in 2026 is the involuntary creation of a permanent establishment of the French company in the telework country. Article 5 of the OECD Model, whose Commentary was updated on 18 November 2025, retains two main criteria. First, the fixed place of business: under paragraph 44.8 of the Commentary, activity carried on at home for less than 50% of total working time over twelve months is in principle not a fixed place of business of the enterprise; above that level the analysis becomes factual and requires a business reason for the presence, such as direct interaction with local customers or suppliers. Second, the dependent agent: the person who habitually decides on transactions that the foreign company merely endorses, the test applied by the French Conseil d'Etat sitting in full tax chamber on 11 December 2020 in Conversant International Ltd (no. 420174), a ruling about a dependent agent and not about a teleworker's home. Concretely, a salesperson prospecting and negotiating abroad, an executive signing purchase orders or customer framework agreements remotely, a manager representing the company in local strategic meetings can be enough to characterise a permanent establishment, even without rented office or local registration. Consequence: the French company must declare in the host country the share of profit attributable to that establishment, pay local corporate tax, sometimes local VAT, and then ask France to eliminate double taxation (treaty credit or exemption depending on the convention). Two other frequent pitfalls: false tax residence, when the company keeps applying French PAS withholding while the employee has become a foreign tax resident (PAS must stop when residence shifts, except for French-source income); and lack of social cover, when the employee works outside EU without CFE or private insurance, and an accident or hospitalisation engages the employer's civil liability under his safety obligation (article L.4121-1 of the French Labour Code).

Permanent establishment: three questions after the OECD update of 18 November 2025#

• Adopt a written international remote work policy annexed to internal rules, validated by the works council where applicable, listing authorised countries, maximum durations and eligible functions.
• Deploy the "country × duration × function" qualification grid with automatic decision and mandatory signature of a temporary contractual amendment before any departure.
• Appoint an HR + CFO duo responsible for follow-up (A1 requests, framework agreements, presence calendars, social and tax filings country by country).
• Require prior declaration of any remote work abroad lasting more than 5 consecutive working days, with mandatory approval before departure.
• Track monthly presence days by country through a shared tool (timesheet export, VPN connection data, HR platform).
• Define a clear switching threshold beyond which the company refuses, proposes a local contract, uses an employer of record (Deel, Remote, Velocity Global) or organises a formal detachment.
• Document in writing, in the amendment, an express ban for non-sales functions to negotiate or sign from the host country, in order to neutralise the permanent establishment risk.
• Annually test the map of international teleworkers and coordinate it with the chartered accountant to anticipate the 25% and 49.9% thresholds and the 183-day rule of article 15 of the treaties.

• EU framework agreement on cross-border telework (1 July 2023): signed by 23 States as of 26 July 2026, including France, Germany, Belgium, Spain, Italy, the Netherlands, Portugal, Switzerland, Luxembourg, Austria and, since 1 February 2026, Estonia. Not all are EU members: Switzerland, Norway and Liechtenstein are signatories without being members. Cap of 49.9% of working time in the State of residence, with a single employer or several employers all established in the same signatory State.
• Regulation (EC) No 883/2004: article 12 (classic detachment capped at 24 months), article 13 (multi-state activity), article 16 (derogations including the telework framework agreement). Outside the EU, bilateral social security treaties apply (France has concluded 41).
• Article 4 B of the French Tax Code: three alternative criteria of French tax residence (home or principal stay, main professional activity, centre of economic interests). Losing one criterion may suffice to lose tax residence if the treaty confirms it.
• Treaty 183-day rule: it sits in article 15 of the OECD Model and decides where the salary is taxable, not where residence lies. Exemption in the State of activity requires three cumulative conditions: a stay of no more than 183 days in any 12-month period, pay borne by an employer that is not a resident of that State, and a cost not borne by a permanent establishment located there.
• Permanent establishment risk under OECD article 5: since the update of 18 November 2025, a teleworker's home is in principle not a fixed place of business below 50% of working time over 12 months; a dependent agent who habitually decides on transactions does engage the company (Conseil d'Etat, full tax chamber, 11 December 2020, no. 420174, Conversant International Ltd). OECD commentaries do not bind States and several have entered reservations.
• Caisse des Français de l'Étranger (CFE): voluntary affiliation is essential for employees teleworking outside EU/EEA/Switzerland, on top of private insurance and international medical cover.
• Employer safety obligation (article L.4121-1 French Labour Code): also covers teleworkers abroad, requires country risk assessment (health, security, climate, infrastructure) and documented preventive measures.
• French law applicable to the contract: can be maintained through express clause (Rome I Regulation) but mandatory provisions of the country of performance apply (working time, leave, minimum wage, dismissal protection).

Non-resident withholding tax: 2026 brackets (article 182 A of the French Tax Code)#

These brackets (BOFiP update of 2 April 2026) only cover salaries paid for an employment actually exercised in France to a person not tax resident in France. For an employee posted outside the EU, membership of the Caisse des Français de l'Étranger stays free and voluntary: it takes effect on the first day of the month following the request, a waiting period applies beyond three months after departure, and contributions are based on gross income capped at the annual social security ceiling, EUR 48,060 in 2026.

• expatriate, detached or impatriate decision matrix
• French impatriate tax regime 2026
• benefits in kind in French payroll 2026
• remote work legal framework and obligations 2026
• payroll outsourcing benefits and vigilance
• 2026 French finance bill key measures for SMEs
• PER executive retirement and tax 2026
• shareholder current account taxation and optimisation
• payroll and HR support in Paris
• French CPA for international groups
• SME accounting services Paris 8
• international accounting services
• Deel, employer of record for distributed teams

• CLEISS : télétravail transfrontalier (employeur)
• CLEISS : accord-cadre européen du 1er juillet 2023 sur le télétravail transfrontalier
• CLEISS : formulaire A1 (législation applicable)
• EUR-Lex : règlement (CE) n° 883/2004 sur la coordination des systèmes de sécurité sociale
• Légifrance : article 4 B du Code général des impôts (domicile fiscal)
• BOFiP : domicile fiscal et résidence fiscale (BOI-IR-CHAMP-10)
• impots.gouv.fr : je pars à l'étranger
• OCDE : modèle de convention fiscale, article 5 (établissement stable)

Freshness note: Current as of 26 July 2026.