The impatriate tax regime provides an autonomous exemption mechanism for days worked abroad.
THE LAW
“The portion of remuneration corresponding to activity performed abroad during the period defined in paragraph 1 is exempt where the stays abroad are carried out in the direct and exclusive interest of the employer” (Article 155 B‑I‑2 of the French Tax Code).
This exemption applies until 31 December of the eighth calendar year following the year in which the impatriate takes up duties in France (duration referred to in Article 155 B‑I‑1 of the French Tax Code).
Upon election, either the portion of remuneration exempted in respect of the impatriation premium and days worked abroad is capped at 50% of total remuneration, or the portion of remuneration exempted in respect of days worked abroad is capped at 20% of taxable remuneration after exemption of the impatriation premium (Article 155 B‑I‑3 of the French Tax Code).
ADMINISTRATIVE GUIDANCE
Remuneration relating to activity performed abroad may be exempt if the stays abroad are carried out by impatriates “in the direct and exclusive interest of the company for which they perform their activity” (BOI‑RSA‑GEO‑40‑10‑20‑20250811, n° 220).
The legal notion of the employer’s direct and exclusive interest is not defined by the tax authorities. However, this notion also appears in Article 81 A‑II‑1° of the French Tax Code concerning expatriation bonuses. Administrative doctrine specifies that holiday days taken during a business trip are excluded and that:
“in accordance with the commitment made by the Minister during parliamentary debates (Senate debates, 19 December 2005, p. 9950), it is accepted that travel within the group to which the employing company belongs – such as commercial, administrative or institutional travel, audit missions, or internal training or information meetings -meets the employer’s direct and exclusive interest” (BOI‑RSA‑GEO‑10‑30‑10‑20160311).
Stays abroad lasting less than twenty‑four hours are taken into account (n° 230).
The exempt portion of remuneration “is that paid in consideration for activity performed abroad (base salary and, where applicable, additional remuneration linked to activity abroad). Article 155 B of the French Tax Code does not set any rule for evaluating this portion of remuneration. It may therefore be:
- set in the employment contract or corporate office agreement;
- determined at the time of travel;
- evaluated on a lump‑sum basis, provided it is consistent with the number, duration and location of the stays abroad.
This is a factual question requiring case‑by‑case analysis. As a result, the competent tax office is entitled to challenge the exemption where there is a clear disproportion between the remuneration relating to activity performed abroad and that relating to activity performed in France.
As a practical rule, and in the absence of identifiable elements, the portion of remuneration corresponding to activity performed abroad may be determined by applying the ratio of days worked abroad to the total number of actual working days in the year. For this purpose, travel time to and from the foreign location is not taken into account.
For the application of this practical rule, the remuneration to which the prorated amount applies corresponds to the annual net taxable remuneration under ordinary salary rules, from which the impatriation bonus—capped, where applicable, by reference to remuneration paid for similar functions—must be deducted” (n° 240).
Justification of travel abroad “may be provided by any means (hotel bills, expense reports, boarding passes or other travel documents, etc.), which must be produced upon request by the tax authorities as part of their audit powers” (n° 250).
Finally, impatriates cannot combine the exemption for days worked abroad under Article 155 B with the exemption for expatriation bonuses under Article 81 A‑II of the same code: an irrevocable election must be made when filing the first annual income tax return (n° 270).
CASE LAW
The notion of the employer’s direct and exclusive interest
According to the tax judge, “the portion of remuneration exempt under the above‑mentioned provisions of Article 155 B‑I‑2 of the French Tax Code is that paid in consideration for activity performed abroad, in the direct and exclusive interest of the original employer or the host employer in France” (TA Cergy‑Pontoise, 9 May 2019, no. 1704691; see also CAA Versailles, 18 November 2021, 3rd Chamber, no. 19VE02459).
This wording, which does not repeat the legal expression “of the employer,” appears to allow the inclusion of intra‑group travel.
Determining remuneration corresponding to activity performed abroad
The taxable portion of a settlement severance payment cannot serve as the basis for calculating the exemption for days worked abroad, since such payment “does not constitute an element of remuneration for the purposes of Article 155 B” (CAA Versailles, 18 November 2021, cited above). In that case, the first‑instance court held that “the settlement payment, which does not correspond to consideration for work or services performed, cannot be regarded as inseparable from the taxpayer’s base remuneration and therefore cannot be considered an ‘impatriation bonus’ within the meaning of Article 155 B” (TA Cergy‑Pontoise, 9 May 2019, cited above). Same approach: TA Cergy‑Pontoise, 29 May 2024, 8th Chamber, no. 2007371.
However, the position of the Conseil d’État accepting (in another case) the calculation of the 30% lump‑sum impatriation bonus on severance payments (CE, 4 October 2023, nos. 466714, 9th and 10th chambers combined) opens the door to a possible exemption of such payments under the “days worked abroad” mechanism. See the remand decision: CAA Paris, 31 January 2025, 5th Chamber, no. 23PA04242.
In a case concerning Article 81 A‑II of the French Tax Code, a taxpayer argued—based on a self‑prepared summary table and copies of travel documents—that the number of days spent abroad in the employer’s direct and exclusive interest was higher than the number retained by the tax authorities (which relied on the employer’s own count, showing fewer days). The tax judge held that only the employer’s count should be regarded as reflecting stays carried out in its direct and exclusive interest (CAA Paris, 8 April 2014, 10th Chamber, no. 13PA01666).
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The exemption for days worked abroad requires a case‑by‑case analysis to confirm its applicability and scope.
Further reading