France: Rules Related to Tax for Hiring Foreign Workers Relaxed
March 13, 2024
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At a Glance
The government has relaxed the rules related to the tax paid by French companies hiring foreign nationals from outside the European Union/European Economic Area/Switzerland. Specifically:
- Employers of French residence permit holders (who are exempt from work authorization) no longer need to pay the foreign worker tax for these workers; and
- Employers subject to the tax only need to pay it once annually, whereas previously, they needed to pay an invoice sent by the General Directorate of Public Finance after each hire.
This measure is part of an effort to streamline the immigration process and ease the process for French employers seeking to attract and hire foreign talent.
The situation
Exemption and collection rules regarding the tax paid by French companies hiring foreign nationals from outside the European Union/European Economic Area (EEA)/Switzerland, have been relaxed.
A closer look
- New exemptions. Employers of French residence permit holders (who are exempt from work authorization) no longer need to pay the foreign worker tax for these workers.
- Centralized tax collection. Employers of foreign nationals from outside the European Union/EEA/Switzerland now only need to pay the tax annually, whereas previously, they needed to respond to an invoice sent by the General Directorate of Public Finance after each hire.
Impact
The relaxed rules should make it more attractive for employers to hire foreign nationals, which is a key development during this time of labor and skills shortages.
Employers will now have the responsibility of identifying the employees subject to the tax proactively once a year, instead of paying an invoice from the government after each hire. The government offers a guide to calculate the taxes owed.
Background
This tax was previously collected by the French Office of Immigration and Integration.
This measure is part of an effort to streamline the immigration process and make France more attractive to foreign talent.
Looking ahead
The new measure allows France to remain competitive and attract the skills and talent that the French economy needs. This aligns with ongoing French government efforts to facilitate procedures for employers and highly qualified workers from non-EU countries to contribute to the country’s economic competitiveness.
Fragomen in France is Fragomen France AARPI., operating as an immigration consultancy/law firm in France. This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].
