Pursuant to Article 155 B of the French Tax Code, employees and company executives coming to France as expats to take up employment in a company based in France, are elligible to a specific Tax Exemption that amounts to that offered in Tax Heavens.
On the double condition of not having been fiscally domiciled in France during the five previous calendar years and becoming French Tax Resident in France, their income earned in France as Expat can be totaly exempt from taxation.
Under these same conditions, this scheme applies on approval to certain self-employed persons, particularly those who come to France to exercise primarily a research and experimental development or provide exceptional economic contribution to France.
The special tax status which consists of partial exemptions from tax on earned income and certain capital income from foreign sources (investment income, copyrights products, gains on sale of securities), applies until 31 December of the fifth calendar year following that of the taking office in France, for the years of domicile in France.
Recent adjustments to the law are aimed at strengthening the system in case of an employee being moved from one position to another within five years of setting up in France.
The exemptions will continue to apply if the different companies the employee works for belong to the same group. This will allow group executives to benefit from the system in a dynamic and flexible environment allowing them to take responsabilities within the same company established in France or another company established in France in the same group.