Retour Actualités | Publié le 19/02/19

TAX ALERT | Main impacts of the French finance bill for 2019 on non-resident individuals

Main impacts of the French finance bill for 2019

on non-resident individuals

February 2019

 

Employees seconded to France may assess at a flat rate of 30% their inpatriation bonus

Under the French inpatriates tax regime (article 155 B of the CGI), foreign employees and executive officers hired by a French company or sent by a foreign company to its French affiliate, are partially exempted from income tax under a number of conditions and for a limited period of time. The inpatriation bonus is basically exempted for income tax purposes for its actual amount. Alternatively, employees may opt to have 30% of their net remuneration treated as an inpatriation bonus, thus exempted from income tax. That option was limited to employees hired directly by a French company. Article 6 of the French Finance Bill now extends that option to persons sent by a foreign company to work in a French established company. This basically applies to employees sent to France in the context of intra-group mobility. These provisions apply to wages paid as from January 1st, 2019 for individuals taking up their position in France as from November 16, 2018.

 

The income tax regime for non-resident individuals is amended

The withholding tax rates applicable to French wages, pensions, and life annuities derived by non-resident individuals (CGI Article 182 A) will be increased as from January 1, 2020. The minimum tax rates of 20% and 14.4% will be increased respectively to 30% and 20% on the portion of the net taxable income exceeding the upper limit of the second portion of the income tax schedule (27 519€).

 

New exemptions from CSG-CRDS on assets income and investment products

In order to comply with EU regulations, the Social Security Financing Act provides that persons covered by a social security scheme in the European Economic Area (EU and EFTA) or Switzerland are now exempted from CSG and CRDS (17,2%) on assets income and investment products (including real estate capital gains), provided that they are not subject to a compulsory social security regime in France. Starting from January 1st, 2018 or January 1st, 2019 depending on the type of incomes, relevant individuals will be only liable for payment of the solidarity contributions at a rate of 7.5%.

 

 

Pauline Combes

Tax specialist

Laurent Dommergues

Tax Director

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