Expatriates: understanding the 30 % flat-rate option

The expatriate tax regime exempts the expatriation bonus from income tax. Without this option, the exemption applies to the actual amount of the bonus, which must be specified in the contract. With the flat-rate option, the bonus is deemed to be equal to 30% of the total net remuneration, even if the contract does not stipulate this. Two limitations remain: a reference remuneration that must be respected and a maximum exemption of 50% of the total remuneration.

This page follows the BOFiP doctrine (BOI-RSA-GEO-40-10-20, version in effect since 11/08/2025) and the administration's page updated on 08/04/2026. It does not cover the details of social security contributions, case law, or the calculation of the final tax. The administration's page updated on 08/04/2026 describes this system; any changes introduced by a finance law will be verified at source.

Who is affected, and for how long?

The scheme applies to individuals who were not tax residents of France for the five calendar years preceding their employment with a French company and who subsequently transfer their tax residence there. Two situations are covered: employees recruited by a company related to their original company (intra-group mobility) and employees recruited directly from abroad. Certain executives treated as employees are also included. Excluded are individuals who come of their own accord or who were already tax residents of France at the time of recruitment.

The scheme runs until December 31st of the 8th calendar year following the start of employment (the BOFiP [French Official Tax Bulletin] uses the 5th year for appointments made before July 6, 2016). The tax authorities provide an example: an appointment made on January 1, 2025, opens the scheme until December 31, 2033. The conditions of residence or principal place of residence and principal professional activity in France are assessed annually. The scheme ceases upon departure from the host company. It is maintained in the event of a change of position or employer within the group, without extending the total duration.

The scheme applies automatically, without prior approval. A tax ruling can be requested to obtain a position that is binding on the tax authorities.

Without option: the actual amount of the premium

The expatriation allowance corresponds to salary supplements directly related to relocation abroad. It is exempt from income tax for its actual amount. When its amount is fixed, it must be clearly stated in the employment contract or corporate mandate agreement, or in an addendum drawn up before the employee takes up their duties. The French tax authorities (BOFiP) allow it to be determined by objective criteria, such as a percentage of salary.

With the option: 30 % of the total net remuneration

The option eliminates the need to prove the actual amount. The bonus is deemed to be equal to 30% of the total net remuneration, whether or not the contract stipulates it.

The BOFiP was updated on 11/08/2025 following a public consultation, to take into account the generalization of the flat-rate assessment resulting from law no. 2018-1317.

The administration's website uses different wording for the basis of the flat-rate tax ("total remuneration" in one place, "net taxable remuneration" in another). The basis indicated above is that of the BOFiP (French Official Tax Bulletin): it must be verified at source before any decision is made.

The two limitations to be aware of

The reference salary

The exemption requires that the taxable remuneration, after exemption, remains at least equal to that received for similar positions. If it is lower, the difference is added back to the taxable base. The taxpayer must be able to demonstrate compliance with this condition by any means, including a certificate from the employer. The condition also applies in the case of a flat-rate option. Furthermore, the BOFiP (Official Bulletin of Public Finances) excludes certain comparative tolerances for bonuses calculated as a percentage or in the case of a flat-rate option: the exact wording should be consulted in the BOFiP before making any decision.

The cap

Each year, taxpayers choose between two caps. The overall cap limits the exemption to 50% of total net remuneration before the tax regime is applied. The other cap limits it to 20% of taxable remuneration, net of the bonus, which is the only portion of remuneration related to work performed abroad. The BOFiP (French Official Tax Bulletin) illustrates this choice with an executive recruited in Germany, paid €140,000 net, including €50,000 for work performed abroad, without a contract bonus, and with a reference salary of €100,000. The flat-rate bonus of €42,000 is reduced to €40,000 after a €2,000 adjustment. With the overall cap, the €90,000 exempt amount (€40,000 + €50,000) is capped at €70,000. With the ceiling of 20 %, the exemption is €40,000 + €20,000 = €60,000.

Not cumulative with the scheme for posted workers

An expatriate seconded abroad by their French employer cannot combine this scheme with that of seconded employees under Article 81 A, II of the French General Tax Code (CGI). They must choose no later than with their tax return for the year they take up their duties or the first year of the scheme, and the choice is irrevocable.

The statements

According to the BOFiP, the mention of exempt remuneration is used to calculate the reference taxable income.

Payroll tax and social security contributions

The bonus is exempt from payroll tax up to the amount exempt from income tax, or, if the flat-rate option is chosen, up to 30% of the remuneration. Regarding social security contributions, the administration indicates that it is possible to opt out of the French basic and supplementary pension schemes, with exemption from the corresponding contributions (Article L767-2 of the Social Security Code). Details should be verified with the Urssaf (French social security collection agency).

Numerical example (fictitious profile)

Situation. Karim, a fictional executive, is recruited directly from abroad by a French company. His total net compensation is €200,000 (net of social security contributions and deductible CSG, before deduction of 10 %). His contract does not include any expatriation bonus. He opts for a fixed-rate assessment.

Hypotheses. No portion of the compensation is linked to work performed abroad. The benchmark salary for similar positions is €120,000. This calculation does not include final tax and deductions.

Issue. What portion of his remuneration is exempt, and is the reference condition met?

Strategy. Calculate the flat-rate bonus of 30 %, compare it to the overall ceiling of 50 %, then compare the remaining taxable remuneration to the reference.

Result. The lump-sum bonus is €200,000 × 30 % = €60,000, below the €100,000 cap. Taxable income falls to €140,000, above the reference of €120,000: no reintegration.

In the second case, the taxable remuneration after exemption (€140,000) is €20,000 less than the reference: the difference is reinstated, as in the example from BOFiP.

The profile is fictitious and its amounts are hypothetical. They do not reflect your actual situation.

What changes depending on your situation

• The date of commencement of duties and the status: employee recruited directly, called in by a company, manager.
• The amount of the reference remuneration for similar functions.
• The presence of a portion of remuneration linked to an activity abroad, which influences the choice of the ceiling.
• A secondment abroad by the employer.
• Elements excluded from the base: profit-sharing, stock options, free shares, employee savings.
• The finance law in force in the year of the declaration.

The rule depends on your situation. No results are guaranteed.