TLDR: French citizens working abroad may qualify for partial or total tax exemptions on salaries and allowances, depending on their situation. Conditions include paying local taxes, the duration of the assignment, and documentation of expenses. Specific exemptions apply to seafarers, impatriates, and diplomatic officials.
Exemptions for employees assigned abroad
The exemption is total if you pay income tax abroad equal to at least two-thirds of the French tax on the same income. Otherwise, the exemption is partial, covering only the difference between the foreign tax and two-thirds of the French tax. The employer must document the expenses covered by the allowances.
Impatriate workers in France
Foreign or non-resident French employees arriving in France to work temporarily at headquarters, logistics centers, or international group offices may benefit from exemptions on specific allowances. Two conditions are essential:
- Not having been tax-resident in France the year before arrival.
- Working in France for a period not exceeding 6 years.
These benefits apply only to expatriation-related allowances, not the base salary.
Seafarers on French ships
Seafarers employed on ships registered with the French International Register (RIF) or Wallis and Futuna benefit from a total income tax exemption for compensation earned during the embarkation period. The exemption applies regardless of the worker’s nationality, provided the ship is registered in the aforementioned registers.
Required conditions and documents
To access exemptions, the employer must provide documentary evidence proving:
- The actual expenses covered by the allowances.
- The effective payment of local income taxes on earnings abroad.
- The duration of the assignment, which must exceed 183 days within 12 months for specific activities.
Tax-exempt allowances must be explicitly provided for in the employment contract or a company agreement.
Limits and exceptions
Maximum duration for impatriates
Exemptions for impatriate employees in France are valid for only 6 years. Beyond this period, even specific allowances become taxable.
Double taxation on foreign assets (ISF/IFI)
French tax residents are taxed on all their assets, both in France and abroad. However, the Impôt sur la Fortune Immobilière (IFI) includes a credit mechanism to avoid double taxation.
International agreements
In some cases, exemptions arise from international agreements. For example, French diplomatic or consular officials abroad are exempt from local taxes under the Vienna Conventions but remain subject to French taxation.
Tax credit to avoid double taxation
When a French citizen works in a country with which France has a double taxation treaty, income earned abroad may be taxed locally, but France applies a tax credit to prevent the same income from being taxed twice.